Chart 1: KLCI chart from 20/10/2009 to 17/02/2010.
Since the rebound at 1224.37 points, the KLCI gained 23.85 or 1.9%. During the rebound of the KLCI, many counters have also rebounded, while the performance varies. Some counters failed to break away from its downtrend despite the rebound; some broke above the dynamic resistance, while some resumed its uptrend. Here are some case studies for this week.
Axiata: Uptrend intact, testing new high
Chart 2: Axiata, chart from 20/10/2009 to 17/02/2010.
As shown on chart 2, despite the price of Axiata retreated, it was supported by the 14, 21, 31 EMA. As indicated by A, the 14, 21, 31 EMA is still serving as the dynamic support for Axiata, price price since rebounded from the 14, 21, 31 EMA, it is now testing its resistance at RM 3.50. This suggests that price of Axiata is still trending up but only resisted by RM 3.50 resistance.
Technically, provided that price of Axiata is supported by the rising 14, 21, 31 EMA, the uptrend shall remains intact. If price should break above RM 3.50 level, it would be making a new high, thus the uptrend is expected to carry on, and the next resistance is seen at RM 3.74. For trend trading investors, as long as price is still supported by the 14, 21, 31 EMA, it is a good idea to hold on to the position, until price should break below the 14, 21, 31 EMA. If investors should feel uncomfortable, a partial profit taking is also a good alternative, in which it partially reduces trading risk while retain a portion for the uptrend potential.
| Leading PER | 17.05 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2008 | 0 sen | 0% | 4.39% |
Table 1: Axiata, yealy Dividend, Dividend Yield, and Net Profit Ratio.
CIMB: Technical Rebound, downtrend remains.
Chart 3: CIMB, chart from 20/10/2009 to 17/02/2010.
As shown on chart 3, as the KLCI technically rebounded, price of CIMB also rebounded from RM12.06 level, and until now, it has gained RM0.495 or 4.3%. However, as indicated by A, it is precisely resisted by the 14, 21, 31 EMA, which is the dynamic resistance. This suggests that the recent rebound was merely a technical rebound, not a reversal yet.
If price should remains resisted by the 14, 21, 31 EMA, there is a risk of resuming its downtrend, while the first support is at RM 12.06 level, and the 14, 21, 31 EMA shall continue serving as the dynamic resistance.
Generally, a technical rebound is not the best time to buy, but a good chance to take profit or get out. If price should start falling again after being resisted by the 14, 21, 31 EMA, and breaks below RM12.06 level, it would be making a new low.
| 4 Q Rolling PER | 18.90 times | Dividend Yield | 2.01% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2008 | 25 sen | 4.27% | 25.22% |
| 31/12/2007 | 25 sen | 2.27% | 31.00% |
| 31/12/2006 | 15 sen | 1.94% | 23.53% |
| 31/12/2005 | 15 sen | 2.63% | 17.51% |
| 31/12/2004 | 15 sen | 3.19% | 18.01% |
Chart 2: CIMB, yearly dividend, dividend yield, and net profit ratio.
Supermx：Break away from a mid term downtrend.
Chart 4: Supermx, chart from 20/10/2009 to 17/02/2010.
As the KLCI took a dip after touching 1308, price of Supermx followed, and formed a T1 downtrend, and price of Supermx also broke below the 14, 21, 31 EMA. However, when the KLCI rebounded from the 1224 level, price of Supermx also rebounded, and also breaking above the 14, 21, 31 EMA as well as the T1 downtrend line. Technically, it breaks away from the mid term downtrend, and managed to stay above the 14, 21, 31 EMA again.
Technically, this is a good signal, suggesting that price of Supermx is now resuming its uptrend, and the best confirmation would be an increased of volume. If price should remain supported by the 14, 21, 31 EMA, the uptrend shall remain intact, and the next resistance is seen at RM 6.18 level. Trend trading investors should hold on to their positions as long as the 14, 21, 31 EMA is still supporting the uptrend. If price should break below the 14, 21, 31 EMA, it would be a signal to take profit, and the lower support line is at RM 4.80 level.
| 4 Q Rolling PER | 13.07 times | Dividend Yield | 0.63% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2008 | 3.25 sen | 4.06% | 5.58% |
| 31/12/2007 | 1.90 sen | 0.63% | 13.85% |
| 31/12/2006 | 6.50 sen | 1.56% | 10.49% |
| 31/12/2005 | 6.50 sen | 1.46% | 12.74% |
| 31/12/2004 | 5.00 sen | 1.06% | 13.83% |
Table 3: Supermx, Yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Technical rebound and reversal is different. Investors should learn to differentiate the above two, and make the best decision with given conditions.
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