[EPMB-7773]: Breaking above resistance, might be forming an uptrend.
Chart 1:EPMB-7773 (01/12/2009～31/03/2010)
As shown on chart 1, price of EPMB formed an Ascending Triangle, with price forming a short term uptrend line but remained resisted by the RM0.525 level. As indicated by A, price of EPMB broke above the RM0.525 level and broke away from its consolidation.
However, as profit taking kicked in, price retraced as a pull-back effect, and it managed to stay above the RM0.525 level. Meanwhile, during the pullback effect, volume also declined as it suggests that the selling pressure was not high.
Technically, if price should rebound from the 14, 21, 31 EMA, the uptrend is expected to resume, and then the 14, 21, 31 EMA shall continue serving as the dynamic support as well as the trailing stop reference. However, if price should break below the 14, 21, 31 EMA, it would means the uptrend has failed, thus a signal to take profit or the cut loss.
| 4 Q Rolling PER | 12.79 times | Dividend Yield | 0.02% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0.1 sen | 0.02% | 1.51% |
| 31/12/2008 | 0 sen | 0% | 1.73% |
| 31/12/2007 | 0 sen | 0% | -0.17% |
| 31/12/2006 | 0 sen | 0% | 1.26% |
| 31/12/2005 | 4.5 sen | 6.82% | 6.36% |
Table 1: EPMB yearly dividend, dividend yield, and net profit ratio.
Revision of previous Case Study: L&G – 3147: Pull back.
Chart 2: L&G-3174 (01/12/2009～31/03/2010)
As shown on chart 2, price of L&G pulled back after breaking above the RM0.515 resistance level. Therefore, the break out above the RM0.515 has failed. Fortunately, price of L&G managed to be supported by the 14, 21, 31 EMA, as indicated by A, and this suggests that the 14, 21, 31 EMA is still serving as the dynamic support, thus L&G has not formed a downtrend yet.
Meanwhile, as indicated by B, as price pulled back, volume also declined significantly. This suggests that the selling pressure was not huge, and technically, it is a healthy correction. Even thought chart wise it shows that there were no panic selling, investors or trader should not buy during a correction.
If price should rebound from the 14, 21, 31 EMA, it would form another Higher-low, and there is a good chance for price to re-test the RM0.515 level. If price should break above the RM0.515 level again with strong volume, it would suggests a resume of the uptrend, thus a buy signal. Then, the 14, 21, 31 EMA shall continue serving as the dynamic support as well as the Trailing Stop reference. On the contrary, if price should break below the 14, 21, 31 EMA, it would means an uptrend has failed, thus a signal to cut loss or to take profit. Next resistance is at RM0.56 and RM0.64 while the support is found at RM0.46.
| 4 Q Rolling PER | 11.11 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/3/2009 | 0 sen | 0% | 40.34% |
| 31/3/2008 | 0 sen | 0% | 23.02% |
| 31/3/2007 | 0 sen | 0% | 7.78% |
| 31/3/2006 | 0 sen | 0% | 24.39% |
| 31/3/2005 | 0 sen | 0% | -79.53% |
Table 2: L&G-3174, yearly dividend, dividend yield, and net profit ratio.
Review of the previous Case Study: OSK-5053: Uptrend consolidation.
Chart 3: OSK-5053 (15/12/2009～14/04/2010)
As shown on chart 3, price of OSK tested the RM 1.46 resistance line and retraced, but it managed to rebound from the 14, 21, 31 EMA, suggesting that the uptrend remains intact. The immediate resistance for OSK is seen at RM1.46 level. (Refer to Arrow A)
Meanwhile, as indicated by B, when price rebounded from the 14, 21, 31 EMA and re-test the RM1.46 level, volume increased, suggesting some increased of buying interest. Technically, when price should break any resistance line, a strong volume is needed.
Nevertheless, if price should break above the RM1.46 level, then the 14, 21, 31 EMA shall resumes its role as a dynamic support as well as the trailing stop reference. In other words, provided that price is supported by the rising 14, 21, 31 EMA, investors should hold, until when price break below the 14, 21, 31 EMA it would a signal to take profit or to cut loss.
| 4 Q Rolling PER | 8.18 times | Dividend Yield | 5.28% |
| 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-5053, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
It is normal to have a correction during an uptrend, and especially a correction with low volume. However, it is not the best time to buy during a correction, and investors has to be cautious and discipline, to buy only when price rebound from the dynamic support.
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