Revision of Last week's Case Study: Maxis – 6012: Weak consolidation.
Chart 1: Maxis – 6012 (11/19/2009 ~ 02/06/2010 )
As indicated by A, price of Maxis rebounded from RM5.10 last week and re-tested the RM5.20 level. Despite the rebound, it failed to break above the 14, 21, 31 Exponential Moving Average, thus suggesting that the overall trend is still downtrend, and the 14, 21, 31 EMA is still serving as the dynamic resistance.
If price of Maxis should consolidate above RM5.20 level, it could extend its consolidation and might have a chance to break away from this downtrend. However, it is not a reversal yet, for a reversal would need strong volume as price rises.
On the other hand, if price should remain resisted by the 14, 21, 31 EMA, and later breaking below the RM5.20 again, it means that the next target will be RM5.10 level, thus a risk of resuming its downtrend.
| Leading PER | 17.57 times | Dividend Yield | 2.88% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 15 sen | 2.72% | 20.73% |
Table 1: Maxis – 6012], yearly dividend, dividend yield, and net profit ratio.
Ranhill – 5030: Downtrend Channel, technical rebound.
Chart 2: Ranhill – 5030 (03/08/2009~02/06/2010)
As indicated by A, price of Ranhill remains in its downtrend channel, with the T1 line being the dynamic resistance while the T2 line is the dynamic support. On the 2nd of June, price of Ranhill rebounded strongly, and tested the 14, 21, 31 EMA, but the selling pressure was still strong, thus price of Ranhill failed to break above the 14, 21, 31 EMA.
Despite the strong technical rebound, the downtrend remains intact. This means, whomever trying to catch this rebound, is actually buying into a downtrend, whether its a short term trading or else, this strategy is high risk.
Nevertheless, one should never over look the risk of a downtrend, as when price falls, in the downside, no matter how high or how low one bought their shares, as long as he or she hold his or her shares, he or she is now losing money, thus increasing the will to break even, and inevitably increasing the selling pressure in the downtrend. Unless there are strong volume, which implies more inflow of fresh capital to off set the selling pressure, it is not easy to reverse the downtrend.
| 4 Q Rolling PER | 1.57 times | Dividend Yield | 1.47% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/06/2009 | 1.0sen | 1.1% | 10.29% |
| 31/06/2008 | 0 sen | 0% | -36.75% |
| 31/06/2007 | 0 sen | 0% | 7.92% |
| 31/06/2006 | 1.5 sen | 1.16% | -0.89% |
| 31/06/2005 | 1.5 sen | 1.19% | 2.22% |
Table 2: Ranhill – 5030, yearly dividend, dividend yield, and net profit ratio.
BJCorp – 3395：Weak Consolidation.
Chart 3: BJCorp – 3395 (04/02/2010~02/06/2010)
As shown on chart 3, price of BJCorp formed a T1 downtrend since May, and until now, price remained resisted by the T1 downtrend line. Fortunately, price of BJCorp managed to find a temporary support at RM 1.45, and therefore, the downside volatility is temporary reduced, thus entering a consolidation stage. But still, with the T1 downtrend line remains intact, the consolidation is likely to be a weak one.
If price should break below RM1.45 level, it would mark an end to the consolidation, and resume its downtrend, and the 14, 21, 31 EMA shall continues serving as the dynamic resistance for Bjcorp, with bearish biased technical outlook. Unless, price could rebound from the RM1.45 and break above the T1 line with strong volume, then only there is a chance of a reversal. Or else, a rebound with weak volume suggests that the buying interest is still low, thus not having sufficient inflow of fresh capital to off set the selling pressure. Nevertheless, next support for Bjcorp is at RM1.32 WinChart Automatic Fibonacci Retracement while the resistance is seen at RM1.60 followed by RM1.70 WinChart Automatic Fibonacci Retracement.
| 4 Q Rolling PER | 0 | Dividend Yield | 2.25% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/04/2009 | 3.35 sen | 3.99% | -0.83% |
| 30/04/2008 | 9 sen | 8.11% | 17.20% |
| 30/04/2007 | 0 sen | 0% | 5.75% |
| 30/04/2006 | 0 sen | 0% | -24.33% |
| 30/04/2005 | 0 sen | 0% | -3.03% |
Table 3: BJCorp – 3395, yearly dividend, dividend yield, net profit ratio.
Conclusion:
In conclusion, after a sharp fall in May, it is normal to have a strong technical rebound as well. However, can one technical rebound breaks the downtrend? Not yet, because the market volume is still very low, thus suggesting that the investors' confidence is still low, and therefore, we don't have the technical conditions for a reversal market. Of course, experienced traders could take advantages of the technical rebound and do some short term trade, but the risk of short term trading is relatively higher.
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