Revision of last week's Case Study: Haio-7668: In Downtrend.
Chart 1: Haio-7668 (15/01/2010～12/05/2010)
As shown on chart 1, after forming a lower-high, price of Haio fell below the 14, 21, 31 EMA, thus the 14, 21, 31 EMA is now serving as the dynamic resistance for Haio, suggesting that Haio is now in downtrend.
As indicated by A, after rebounded from RM3.80~RM3.85 support, price of Haio failed to break above the 14, 21, 31 EMA, thus suggesting that the downtrend remains intact. Technically, price has to break above the dynamic resistance with strong volume, in order to break away from the downtrend, or else, the technical outlook shall remains bearish biased.
Therefore, if price should continue resisted by the 14, 21, 31 EMA and break below RM3.80, it would be making a 3 months new low, thus a signal suggesting to cut loss, because the next support is seen at RM3.46 level. Resistance for Haio is at RM 4.36~RM4.40.
| 4Q Rolling PER | 15.7 times | Dividend Yield | 10.29% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/04/2009 | 42 sen | 11.11% | 11.96% |
| 30/04/2008 | 40 sen | 11.17% | 12.97% |
| 30/04/2007 | 18 sen | 8.11% | 11.29% |
| 30/04/2006 | 8 sen | 6.35% | 7.06% |
| 30/04/2005 | 6 sen | 6.00% | 3.95% |
Table 1: Haio-7668, yearly dividend, dividend yield, and net profit ratio.
Unisem-5005: Short term uptrend ended, but the mid-long term remains intact.
Chart 2: Unisem-5005 (15/01/2010～12/05/2010)
As shown on Chart 2, price of Unisem fell below the T1 uptrend line, suggesting that the T1 uptrend line has ended, and therefore, for those investors who has bought this share based on the T1 uptrend line, this is a signal to take profit or to cut loss. However, after breaking below T1, price of Unisem is finding its support at the T2 uptrend line, which is a longer-term uptrend line. Therefore, this shows that the shorter uptrend has ended, while the longer uptrend remains intact.
Despite the longer term uptrend remains intact, investors has to be clear of their own entry point or position, and must honor their own trading plan. When price should break below T1 uptrend, they should execute the cut-loss plan or at least reducing their position partially, and wait to see if price should rebound from the T2 line for the rest of their holding.
It is important to know that the risk of investors who bought based on the T1 line and T2 line is totally different. For example, if a person who entered with the T1 line signal, but refuse to cut-loss when price breaks below the T1 line, because he thinks that the T2 line is still intact, and he is suffering losses, while the investor who bought based on the T2 line signal is still in profit. Therefore, the risk profile of investor varies.
One of the most dangerous mind set is refusing to cut-loss and stubbornly holding in losing position(s). For example, a person who entered a position was initially wanted to take advantage of an uptrend, and later price breaks below the uptrend, but this person refuse to cut-loss, but trying to look for excuses or reasons to convince himself to be a 'long term investor', be it good earnings, dividend, contracts awarded, or anything that he could think of. But in reality, this person only want to break even, and if he was lucky, and price returned to his break-even point, he would sell and clear his position, and all the above reasons such as dividend, contracts, and good earnings would seem irrelevant anymore. This is a typical double standard of a loser, and the biggest account killer.
Nevertheless, if price of Unisem should also break below the T2 uptrend line, it means that longer term uptrend is also weakening, thus investors must honor their own trading plan. There is no buy signal yet for Unisem until a valid break out above the 14, 21, 31 EMA, with strong volume.
| 4 Q Rolling PER | 12.22 times | Dividend Yield | 0.81% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 2.50 sen | 1.14% | 5.97% |
| 31/12/2008 | 2.50 sen | 3.57% | 1.61% |
| 31/12/2007 | 10.00 sen | 6.06% | 12.25% |
| 31/12/2006 | 10.00 sen | 6.06% | 10.38% |
| 31/12/2005 | 8.00 sen | 5.76% | 3.92% |
Table 2: Unisem-5005, yearly dividend, dividend yield, and net profit ratio.
MPHB-3859: Dowtrend.
Chart 3: MPHB-3859 (15/01/2010～12/05/2010)
As shown on chart 3, price of MPHB is currently staying below the falling T1 downtrend line, suggesting that the downtrend is still in place. Despite rebounding from RM2.00, price of MPHB has failed to break above the T1. Therefore, the rebound was merely a technical rebound, not a reversal. Meanwhile, while the downtrend is still intact, volume traded for MPHB is still low, thus implying the buying interest is relatively insufficient to off set the selling pressure of breaking even.
Technically, provided that the T1 line is still in place, the technical outlook for MPHB shall remains weak, until a valid break out above the T1 line. If price should break above the T1 line, it would break away from its downtrend, and possibly consolidate. As for a reversal signal, price has to break above the T1 line with strong volume. Current support for MPHB is at RM1.98～RM2.00 while the resistance is at RM2.17～RM2.18.
| （4 Q Rolling PER | 6.63 times | Dividend Yield | 4.25% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 9.00 sen | 4.66% | 10.15% |
| 31/12/2008 | 10.00 sen | 9.26% | 4.31% |
| 31/12/2007 | 11.00 sen | 4.74% | 11.71% |
| 31/12/2006 | 0 sen | 0% | 36.54% |
| 31/12/2005 | 0 sen | 0% | -69.12% |
Table 3: MPHB-3859, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Generally, a stock or a market will take some time to form a reversal, from bullish to bearish, or vice-versa. There are signals and characteristics of a reversal, which is higher-low or lower-highs, followed by new high or new low. Therefore, by understanding these characteristics, one would not be buying too early nor exiting too late.
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