OSK – 5053: Breaking away from downtrend.
Chart 1: OSK – 5053 (03/03/2010～23/06/2010)
As indicated by A, after breaking above the T1 downtrend line, price of OSK also broke above the 14, 21, 31 EMA, with the immediate technical outlook turning to positive. If price of OSK should form a higher-low above the rising 14, 21, 31 EMA, it would be a characteristic of an uptrend, and the best confirmation to that is a strong volume. Then, the 14, 21, 31 EMA would be serving as a dynamic support for the uptrend.
As for investors who has not bought this counter, the current conditions are not the most ideal buy signal. However, as for those who are holding OSK, it is a good idea to hold on to this stock for as long as it could stay above the 14, 21,31 EMA. Nevertheless, support is at RM1.22 while the resistance is at RM1.40.
| 4 Q Rolling PER | 6.39 times | Dividend Yield | 5.68% |
| 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 1:OSK – 5053, yearly dividend, dividend yield, and net profit ratio.
Muhibah – 5703: Signs of an uptrend formation.
Chart 2: Muhibah – 5703 (10/2/2010～23/06/2010)
As indicated by A, price of Muhibah broke above the 14, 21 ,31 EMA, possibly forming an uptrend. However, it is testing the RM0.95 Fibonacci resistance (38.2% Retracement line). If price should retreat, it is very normal, but it has to rebound from the 14, 21, 31 EMA in order to form a higher low, which is an important characteristic of an ideal uptrend. If price should form a higher-low, with strong volume, it would be a buy signal.
The above mentioned technical conditions are still not available. Based on the current market sentiment, if there were no positive news to trigger some buying interest, volume is expected to stay low. In short, it is harder to wash out the selling pressure if volume should stay low. Resistance for Muhibah is at RM0.985, RM1.02 and RM1.07 Fibonacci, while the support is at RM 0.90.
| 4 Q Rolling PER | 86.36 times | Dividend Yield | 2.63 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/03/2010 | 2.5 sen | 2.72 % | 0.64 % |
| 31/03/2009 | 2.5 sen | 2.53 % | 1.02 % |
| 31/03/2008 | 4.5 sen | 1.20 % | 4.94 % |
| 31/03/2007 | 7.5 sen | 2.88 % | 3.06 % |
| 31/03/2006 | 4 sen | 5.76 % | 2.68 % |
Table 2: Muhibah – 5703, Yearly dividend, dividend yield, and net profit ratio.
KNM – 7164: Could be forming a Rounding Bottom.
Chart 3: KNM – 7164 (03/03/2010～23/06/2010)
As indicated by A, the Bollinger Bands of KNM re-expanded, with price of KNM above the Bollinger Middle Band, thus showing an improvement of the immediate technical outlook. However, volume remains low to confirm such positive signal.
Currently, KNM is likely to form a Rounding Bottom pattern. Generally, after falling in a downtrend, when stock price consolidated sideways for a longer period of time, it could form a Rounding Bottom. The characteristic of a Rounding bottom is that price gradually regain its position, and volume gradually increases. However, it is very difficult to catch the timing of a Rounding Bottom, for some formation of Rounding Bottom could take up to 6 months. Therefore, investors who buy a Rounding Bottom stock is expected to hold the stock for a considerably longer time frame.
Since the period of holding is longer before the actual uptrend is formed, the open position is exposed to any changes of external factors, thus a higher risk of uncertainty, and less control for investors. Therefore, before one should take up a Rounding Bottom position, one should consider the above carefully. Nevertheless, support for KNM is at RM0.47～RM0.48 level.
| 4 Q Rolling PER | 18.18 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/1/2010 | 0 sen | 0% | 9.37% |
| 31/1/2009 | 1.5 sen | 3.7% | 13.30% |
| 31/1/2008 | 4 sen | 0.52% | 16.29% |
| 31/1/2007 | 5 sen | 0.57% | 14.56% |
| 31/1/200 | 5 sen | 1.40% | 11.97% |
Table 3: KNM – 7164, Yearly dividend, dividend yield, and net profit ratio.
Conclusion:
As the KLCI is showing some sign of regaining its strength, many counters were breaking away from their downtrend. However, the lack of volume is still a major set back. Therefore, the sustainability of this improvement is doubtful. In other words, investors are reminded to follow their trading plan strictly, and cut loss, if the stock turns the other way round.
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