KLCI, UEMLand, Perisai, EO

Chart 1: KLCI as at 44/5/2011.

As at the 4th of May, the KLCI has been consolidating in a sideways manner for the past week, and as a result, the 14, 21, 31 EMA are losing their gradient. In other words, when the moving average lines are staying flat, the significance of their signals is reduced. Meanwhile, as illustrated by the dotted line, the KLCI might be forming a lower-high, which is an early sign of weakness.

As indicated by A, total market volume remains below the 40-day Volume Moving Average, and this suggests that the market is indeed quiet, as inflow of fresh capital is also low. Also, it implies that the investors' confidence is also low. It is like boiling water, where you have to keep the heat intact, or else, once the heat is removed, the water cools down. Don't forget that this is a the entire market volume that we are talking about here, and if total market volume is low, the chances of individual counters to sustain their uptrend is also affected.

This week's Case Studies:

Uemland – 5148: Remains in consolidation.

Chart 2: Uemland – 5148 as at 04/05/2011.

As shown on chart 2, price of UEMland has been consolidating in a Rectangular pattern, with RM3.00 being the resistance, and the RM2.65 being the support. Technically, when price is staying in a rectangular pattern or a trading range, the direction is usually unclear, thus not suitable for trading.

Although price of UEMland been supported by the RM2.65, the recent rebounds, has shown some weakness as price failed to touch RM3.00, but instead, forming lower-highs, as illustrated by the dotted line. The lower-high is showing an early weakening signal for UEMLand.

If price should later break below RM2.65, it would be making a 4 months new low. It means that all investors whom have been holding in this 4 months, will be turning their profit (if any) into losses, thus creating more negative memory, and eventually increasing the selling pressure. Therefore, at this time where the weakness is still in place, it is not a good time to buy.

If price should reverse, then it should first form a Higher-low, then breaking above RM3.00 with strong volume. If price should break below RM2.65, the next support are found at RM2.38 followed by the RM2.00 psychological level.

4 Q Rolling PER	44.83 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2010	0 sen	0.00%	41.42%
31/12/2009	0 sen	0.00%	28.44%
31/12/2008	0 sen	0.00%	14.50%

Table 1: Uemland – 5148, yearly dividend, dividend yield, and net profit ratio.

Perisai – 0047: Uptrend was violated.

Chart 3: Perisai – 0047 as at 04/05/2011.

As indicated by A on Chart 3, price of Perisai formed a Lower-high, as illustrated by the dotted line, which suggests a weakness of price movement. Price of Perisai also broke below the 14, 21, 31 EMA as well as the RM0.79 support, thus the uptrend was violated.

Although no one knows where the weakening price movement shall continue, one must honor his or her own trading plan which was set before or at the time buying this stock. Since the uptrend is violated, it is logic to cut loss or to take profit.

Technically, provided that price of Perisai is still staying below the falling 14, 21, 31 EMA, the technical outlook for Perisai is on the negative side, and there is no buying signal, until a valid break out above the 14, 21, 31 EMA with a formation of Higher-Low.

4 Q Rolling PER	50.32 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2010	0 sen	0.00%	13.63%
31/12/2009	0 sen	0.00%	32.60%
31/12/2008	0 sen	0.00%	20.98%
31/12/2007	0 sen	0.00%	7.55%
31/12/2006	0 sen	0.00%	4.28%

Table 2: Perisai – 0047, yearly dividend, dividend yield, and net profit ratio.

　

E&O – 3417: Pullback effect.

Chart 4: E&O – 3417 as at 04/05/2011.

As indicated by A, price of E&O has been staying in a short term uptrend since last month and even broke above the RM1.38 resistance on the 28th of April, breaking a 3 months new high. After the breakout, price of E&O has its high reaching RM 1.54 but profit taking started to kick in and price retreated as a pullback effect.

It is quite normal to have a pull-back after breaking above a resistance, and technically, price should stay above its recently broken resistance (RM 1.38) and the break out shall remains intact. Ideally, volume has to be reduced during the pull-back, this means that the selling pressure was not too strong. But as price rebound again, volume has to be significantly higher in order to resume its uptrend. On the other hand, if price should break below RM1.38, the break out would be a faulty one.

Nevertheless, for those whom are already in position, it is a good idea to use the 14, 21, 31 EMA as a trailing stop reference, by lifting the cut-loss or profit taking level gradually higher according to the 14, 21, 31 EMA. This way, it will gradually reduce your trading risk.

4 Q Rolling PER	25.60 times	Dividend Yield	2.53%
Dividend		Dividend Yield	Net Profit Ratio
31/03/2010	3.80 sen	4.29%	20.12%
31/03/2009	0 sen	0.00%	-12.45%
31/03/2008	5 sen	2.78%	24.95%
31/03/2007	4 sen	1.84%	5.76%
31/03/2006	0 sen	0.00%	12.93%

Table 3: E&O – 3417, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

As an investor or trader, one should realize that there are times where the market is bullish, bearish, and also in an unclear trendless situation. It is said that different strategies are being applied for different market situation, for example, some choose to short the market during a bearish trend. But the point is, it requires different skills for different strategies, and one does not have to imitate what others do. We have to first know what we are capable of, our trading style, capital allocation, and emotional control. We will have to always remind ourselves that we don't have to trade all the time. When situation is uncertain, or if one should feel uncomfortable, it is perfectly OK to stay out of the market.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

AIRASIA, EO, MYEG

After rising for a few consecutive days, the KLCI had its peak touching 1576.95 and started to retreat as profit taking took place. Despite the profit taking activities, the KLCI uptrend remains unaffected, as the dynamic support of 14, 21, 31 EMA remains intact. As a result, many counters are still trending up.

AIRASIA – 5099: Making historical new high again.

Chart 1: AIRASIA – 5099 as at 12/01/2011.

As shown on chart 1, price of AirAsia broke above the RM2.75 briefly a while ago, but it pullback back to below RM2.75, and the break out was a false one. However, as indicated by A, after the pullback, price of AirAsia was supported by the 14, 21, 31 EMA, and price rebounded strongly again, and this time breaking above the RM2.75 resistance, and marked a historical new high of RM2.86.

Technically, as long as price of AirAsia could stay above the 14, 21, 31 EMA, the uptrend shall remains intact, and as for those whom are already in position, it is a good idea to hold, until the uptrend is over. Provided that one should lift the cut loss level gradually higher according to the 14, 21, 31 EMA, and this way, it will slowly reduce trading risk while maximizing the potential of the uptrend.

As for those who had just bought, the cut loss level is at RM2.53. If price should continue rising, then investors shall apply the trailing stop reference using the 14, 21, 31 EMA.

4 Q Rolling PER	9.14 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0.00%	17.27%
31/12/2008	0 sen	0.00%	-17.87%
31/12/2007	0 sen	0.00%	38.90%
31/12/2006	0 sen	0.00%	31.07%
31/12/2005	0 sen	0.00%	10.25%

Table 1: AIRASIA – 5099, yearly dividend, dividend yield, and net profit ratio.

E&O – 3417: Breaking away from its consolidation, uptrend yet to confirm.

Chart 2: E&O – 3417 as at12/01/2011.

As shown on chart 2, price of E&O breaks above the RM1.25 resistance level, breaking above the trading range. Price went up to RM1.38, but profit taking took place and stopped the price from rising. However, as indicated by A, despite the profit taking, price of E&O did not retreat sharply, and it is temporary consolidating in a sideways manner.

While price is consolidating now, it is also being supported by the 14, 21, 31 EMA as the 14, 21, 31 EMA is gradually moving closer to the price. If price of E&O should rebound from the 14, 21, 31 EMA, it would form a Higher-Low, thus an important characteristic of an uptrend. Generally, when price forms a higher-low, it can be viewed as a buy signal as well, as long as when price is rising, a proper trailing stop is applied, the trading risk is generally low. As for those whom are already in position, a good idea would be to hold as long as price is above the 14, 21, 31 EMA.

4 Q Rolling PER	20.03 times	Dividend Yield	2.90%
Dividend		Dividend Yield	Net Profit Ratio
30/03/2010	3.80 sen	4.29%	20.12%
30/03/2009	0 sen	0.00%	-12.45%
30/03/2008	5 sen	2.78%	24.95%
30/03/2007	4 sen	1.84%	5.76%
30/03/2006	0 sen	0.00%	12.93%

Table 2: E&O – 3417, yearly dividend, dividend yield, and net profit ratio.

MYEG – 0138: Gap up breaking resistance.

Chart 3: MYEG – 0138 as at 12/01/2011.

As shown on chart 3, price of MYEG has been testing the RM 0.835 resistance for many times, and therefore, the upside room was limited by this resistance.

As indicated by A, price of MYEG gapped up on the 12th of January, breaking above the RM 0.835 resistance. At the same time, volume traded increased significantly, as indicated by B, and this suggests that there was a strong inflow of fresh capital to off set the selling pressure at the resistance, thus able to push the price higher, and breaking away from the resistance which lasted for 7 months.

Technically, when price break out from a resistance, it should stay above the RM0.835 level, or else, a pullback below this level would announced a false break out. Therefore, the RM0.835 is the base line for now. Once price of MYEG continue rising, then only investors could use the 14, 21, 31 EMA as a trailing stop reference, then as long as price should stay above the 14, 21, 31 EMA, it is a good idea to hold. As for those investors whom are uncomfortable to hold, he or she may choose to take profit partially.

4 Q Rolling PER	27.73 times	Dividend Yield	0.55%
Dividend		Dividend Yield	Net Profit Ratio
30/06/2010	0.5 sen	0.69%	33.61%
30/06/2009	1.82 sen	4.18%	32.77%
30/06/2008	2.00 sen	2.21%	29.99%
30/06/2007	0 sen	0.00%	27.71%
30/06/2006	0 sen	0.00%	0.00%

Table 3: MYEG – 0138, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

When the broad market is still bullish, many individual counters are staying in their uptrend, some are even making new high. However, it is still important that one should honor their own trading plan, and know the maximum risk that they can afford.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

IOI, Kinstel, EO

Despite the KLCI upside movement was not impressive, many counters, on the other hand, had notable gains, especially those counters that had been falling in the previous months. This is mostly due to a consensus that most investors believe that these counters would have a bigger upside room to gain. Let's continue with this week's case studies.

IOIcorp – 1961: Preparing for a new movement.

Chart 1: IOIcorp – 1961 (14/04/2010 ~ 05/08/2010 )

As indicated by A, price of IOI has been moving sideways, in its consolidation stage. As it is moving sideways, the fluctuation is getting narrower, thus the Bollinger Bands contracted, confirming the consolidation signal. Other than showing a consolidation signal, the contraction of the Bollinger Bands also implies that IOI is now preparing for a new movement, and the direction of the new movement shall only be revealed once the Bollinger Bands re-expanded.

If the Bollinger Bands should re-expand, it would mark an end to the consolidation and a beginning of a new movement. If price of IOI should remain above the Bollinger Middle Band as the Bollinger Bands expands, it would be a bullish biased signal. Otherwise, if price of IOI should stay below the Bollinger Middle Band, as the Bollinger Bands expands, it would be a bearish biased signal. Thus a signal to cut loss. Nevertheless, immediate support for IOI is seen at RM5.00 while the resistance are at RM 5.40 followed by RM5.40.

4 Q Rolling PER	15.74 times	Dividend Yield	1.56%
Dividend		Dividend Yield	Net Profit Ratio
30/6/2009	8 sen	1.69 %	6.74 %
30/6/2008	17 sen	2.28 %	15.22%
30/6/2007	7 sen	1.35 %	16.55 %
30/6/2006	43.5 sen	3.04 %	13,81 %
30/6/2005	35 sen	3.33 %	14.86 %

Table 1: IOIcorp – 1961, yearly dividend, dividend yield, and net profit ratio.

Kinstel – 5060: Breakout from consolidation, might be forming an uptrend.

Chart 2: Kinstel – 5060 (14/04/2010 ~ 05/08/2010)

As shown on chart 2, price of Kinstel was consolidating below RM0.86 for about 2 months, with low volume, suggesting that the buying interests was low, until price broke above RM0.86 level, volume increased significantly, implying some increased of buying interests.

As indicated by A, as it break above RM0.86 resistance, breaking away from the consolidation, with strong volume, this suggests that new inflow of capital, with buyers taking selling price, thus giving a sign of an uptrend formation.

Although price pulled back soon after breaking above RM0.86, it is rather normal. Technically, as long as price should stay above the 14, 21, 31 EMA, the uptrend is still intact. With the price of Kinstel forming a higher-low, with strong volume, the uptrend is set to continue, if other external conditions are unchanged. Next resistance for Kinstel is seen at RM0.96 followed by RM 1.00.

4 Q Rolling PER	11.35 times	Dividend Yield	1.09 %
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	1 sen	1.01 %	0.95%
31/12/2008	1.7 sen	4 %	1.52%
31/12/2007	1.7 sen	1.27 %	6.38%
31/12/2006	7.5 sen	4.6 %	35.60%
31/12/2005	5 sen	5.49 %	3.57%

Table 2: Kinstel – 5060, Yearly dividend, dividend yield, and net profit ratio.

Revision of Last week's Case Study: E&O – 3417: Technical correction after over-heated.

Chart 3: E&O – 3417 (14/04/2010-05/08/2010)

As shown on chart 3, price of E&O touched RM1.29 last week, and that was the height since 20th of Oct, 2009. However, profit taking pushed the price down, as a form of technical correction. Fortunately, the retreat was rather mild and it is still still staying above the 14, 21, 31 EMA, dynamic support. This shows that the overall uptrend is still intact.

Technically, the most ideal correction is the low fluctuation, sideways movement. This is because when price is moving sideways, the selling pressure is not high and at the same time, it attracts new buyers. In short, if price should move sideways for a short period, it is usually a healthy correction.

If price should rebound from the 14, 21, 31 EMA, after the correction, and form another higher-low, with strong volume, it would be a buy signal. If investor should follow this buy signal, he or she shall take the 14, 21, 31 EMA as the trailing stop reference. If price should stay above the 14, 21, 31 EMA, it is a good idea to hold. But if price should break below 14, 21, 31 EMA, it would be a signal to take profit or to cut loss. Next resistance are found at RM1.29~RM1.30 followed by RM1.40~RM1.41.

4 Q Rolling PER	18.17 times	Dividend Yield	3.14%
Dividend		Dividend Yield	Net Profit Ratio
31/03/2010	3.8 sen	4.29%	20.12%
31/03/2009	0 sen	0%	-12.45%
31/03/2008	5 sen	2.78%	24.95%
31/03/2007	4 sen	1.84%	5.76%
31/03/2006	0 sen	0%	12.93%

Table 3: E&O – 3417, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

It is perfectly normal to see a correction after a rally, but as long as the price could stay above the 14, 21, 31 EMA, the uptrend shall remains intact. Therefore, investors who wish to trend a trend, should take the 14, 21, 31 EMA as the trailing stop reference.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Bjcorp, Axiata, EO

As the performance of the KLCI continues to improve, coupled with total market volume staying above the 40-day VMA level, the market sentiment is looking better. But, there are still counters failing to form an uptrend. Let's study some of the case studies.

BJcorp – 3395: Technical Rebound.

Chart 1: BJcorp – 3395 (06/04/2010 ~ 28/07/2010)

As indicated by A, price of Bjcorp rebounded on Wednesday, but it was only a technical rebound, for it is still resisted by the 14, 21, 31 EMA, which is still serving as the dynamic resistance. Therefore, the downtrend remains intact.

As shown on the chart above, there were many technical rebound during this course of downtrend, but each rebound failed to break above the dynamic resistance, and later formed a lower-high. Which is the characteristic of a downtrend.

If price should rebound but resisted by the 14, 21, 31 EMA again, it means that the downtrend is still in place, thus no buying signal yet. As for those who wanted to catch a rebound, do note that the risk is catching a rebound is high. If price should start falling again, and later break below RM0.995, itwoudl be making a new low.

Technically, the most ideal buy signal would be a valid break out above the 14, 21, 31 EMA, then followed by a mild retreat of price with thin volume, and then a rebound above the 14, 21, 31 EMA with strong volume, forming a higher-low. Nevertheless, support for Bjcorp is at RM 0.995 or RM1.00 while the resistance is still the 14, 21, 31 EMA.

4 Q Rolling PER	53.17 times	Dividend Yield	0.92%
Dividend		Dividend Yield	Net Profit Ratio
30/4/2010	1 sen	0.79 %	1.23 %
30/4/2009	3.35 sen	3.99 %	-0.83%
30/4/2008	9 sen	8.11 %	17.20 %
30/4/2007	0 sen	0 %	5.75 %
30/4/2006	0 sen	0 %	-24.33 %

Table 1: Bjcorp, yearly dividend, dividend yield and net profit ratio.

Axiata – 6888: Testing New High.

Chart 2: Axiata – 6888 (07/04/2010 ~ 28/07/2010)

After breaking above the RM3.80 resistance, it formed an uptrend, and at the same time staying above the 14, 21, 31 EMA. As shown on chart 2, it hit a high on the 14thof July, at RM4.20, and price retreated later with lesser volume. After the retreat, it managed to rebound again from the 14, 21, 31 EMA, as indicated by A, thus the uptrend is remains intact.

Currently, Axiata is about to test the RM4.20 resistance again, and if it could break above the RM4.20 it would be making a 20 months new high, and the uptrend shall continue. However, a strong volume is needed to confirm such breakout. If price should break out RM4.20 with thin volume, there is a risk of a false break out.

Nevertheless, if price should break above RM4.20, it would be a good idea to hold on to the position for those who are already in positions. As for those who are waiting to buy, an ideal buy signal would be at a higher-low. Next resistance is seen at RM5.00.

4 Q Rolling PER	13.83 times	Dividend Yield	0 %
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0 %	12.61%
31/12/2008	0 sen	0 %	4.39%

Table 2: Axiata – 6888, yearly dividend, dividend yield, and net profit ratio.

Revision of last week's Case Study: E&O – 3417: In uptrend.

Chart 3: E&O – 3417 (07/04/2010 ~ 28/07/2010)

As shown on chart 3, ever since breaking above the 14, 21, 31 EMA, E&O formed an uptrend, while supported by the 14, 21, 31 EMA. As indicated by A, after breaking above the L1 downtrend line, until now it has not had any correction yet, but instead, the rally speed up, with its price currently about 10% above the 14, 21, 31 EMA level. Therefore, as the rally speed up, it is a wiser move to tighten stop loss level. For the correction could be a sharp one.

Since the rally is speeding up, it might not be too practical to apply the 14, 21, 31 EMA as a trailing stop reference. Therefore, it would be more practical to apply “yesterday's low” as the trailing stop reference.

In short, if price should continue to rally, investors will continue to hold their share, but lift the stop loss level to yesterday's low. If price should retreat and break below yesterday's low, it would be a signal to take profit, or partial profit taking. Until the price should move sideways, then the 14, 21, 31 EMA trailing stop reference would resume.

4 Q Rolling PER	16.37 time	Dividend Yield	3.49%
Dividend		Dividend Yield	Net Profit Ratio
31/03/2010	3.8 sen	4.29%	20.12%
31/03/2009	0 sen	0%	-12.45%
31/03/2008	5 sen	2.78%	24.95%
31/03/2007	4 sen	1.84%	5.76%
31/03/2006	0 sen	0%	12.93%

Table 3: E&O – 3417, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

Despite the KLCI is gaining strength, not all counters are moving in uptrend. Therefore, it is very important that one should pick stock carefully, and avoid stocks still trending in downtrend. As for taking up new position, it is crucial to set up an trading and cut loss plan.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Case Studies [Lionind] [EO] [OSK].

The KLCI managed to rebound from the 1292 WinChart Automatic Fibonacci Retracement (38.2% retracement), gaining about 40 points, let us study a few case studies for this week.

Lionind: Waiting for breakout Resistance of Ascending Triangle:

Chart 1: Lionind (01/12/2009～31/03/2010)

Price of Lionind formed an Ascending Triangle, with the T1line being the dynamic support, and the resistance is at RM 1.85 level. An Ascending Triangle it self is an short-mid term uptrend biased consolidation but with limited upside room due to the resistance. And the characteristic of an Ascending Triangle is that the fluctuation of price will get narrower and narrower as it moves towards the tip of the triangle.

Technically, whenever price rebound from T1 line, it is forming a Higher-low, suggesting that the uptrend is still intact, but price would still need to break above the RM1.85 resistance in order to make room for a healthy uptrend.

If price should rebound form the T1 line and also break above RM1.85 resistance, it would be an end to the consolidation, and a good chance for the uptrend to continue. However, this has to be confirmed with strong volume at the break out, or it could be a “false breakout”. Nevertheless, if investors or trader were to apply the 14, 21, 31 EMA as a trailing stop method, the trading risk is still minimal. Provided that price of Lionind is still supported by the 14, 21, 31 EMA, the uptrend remains intact, and if price should break below the 14, 21, 31 EMA, it would be a signal to take profit or to cut loss.

Leading PER	4.16 times	Dividend Yield	0.56%
Dividend		Dividend Yield	Net Profit Ratio
30/06/2009	1 sen	0.8%	-6.06%
30/06/2008	1 sen	0.38%	12.43%
30/06/2007	1 sen	0.57%	4.36%
30/06/2006	0.5 sen	0.52%	-0.29%
30/06/2005	1 sen	0.81%	8.26%

Table 1: Lionind, yearly dividend, dividend yield, and net profit ratio.

E&O: Waiting for form a higher-low:

Chart 2: E&O (01/12/2009～31/03/2010)

As shown on chart 2, price of E&O rebounded from the RM0.91 level, and breaking above the 14, 21, 31 EMA. However, it hits a resistance at RM1.04 level, as profit taking took place. As indicated by A, price retreated after hitting the resistance at RM1.04 but now testing the 14, 21, 31 EMA.

If price should rebound from th 14, 21, 31 EMA, there is a good chance that it would form a Higher-low, which is the first technically criteria of an uptrend. However, when price form a higher-lower, a strong volume is needed, and it would be an ideal condition. After forming an higher-lower, the immediate target would be RM1.04 level, and it would require strong volume again to break above the RM1.04 resistance.

Technically, when it forms a Higher-low, it would be a first buy signal, with the 14, 21, 31 EMA being the dynamic support as well as a trailing stop, and provided that price could stay above the 14, 21, 31 EMA, there is a chance of an uptrend formation, and until price should break below the 14, 21, 31 EMA, then, it would be a signal to take profit or to cut loss.

Leading PER	29.35 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/3/2009	0 sen	0%	-12.45%
31/3/2008	5 sen	2.78%	24.95%
31/3/2007	4 sen	1.84%	5.76%
31/3/2006	0 sen	0%	12.93%
31/3/2005	0 sen	0%	9.3%

Table 2: E&O, yearly dividend, dividend yield, and net profit ratio.

OSK: Uptrend intact:

Chart 3: OSK (5/1/2010～31/03/2010)

As indicated on Chart 3, price of OSK formed the T1 uptrend, while the 14, 21, 31 EMA is still supporting the uptrend and serving as the dynamic support. As indicated by A, price consolidated after rebound from the T1 line, and this is a very typical behavior of a healthy uptrend. Provided that the price should remain supported by the T1 or the 14, 21, 31 EMA, the uptrend remains intact.

Immediate resistance for OSK is at RM1.40 level, and the next resistance is seen at RM1.46. Technically, volume has to increase in order to support the break out, while the 14, 21, 31 EMA serves as the trailing reference.

4 Q Rolling PER	7.95 times	Dividend Yield	8.81%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	7.5 sen	6.1%	13.73%
31/12/2008	7.5 sen	7.58%	16.59%
31/12/2007	20 sen	8.62%	21.38%
31/12/2006	12.5 sen	6.38%	23.84%
31/12/2005	7.5 sen	7.85%	13.52%

Table 3: OSK, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
When the broad market is trending up, many individual counters would be forming uptrend as well, but investors should never carelessly picking any stock. It is important to know that a healthy uptrend should have higher-lows and breaking new highs, together with the confirmation of volume, or else, they could be giving false break out signal.

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