Chart 1: KLCI
Revision of last week's Case Study: Scomi – 7158 : Breaking above RM0.42 resistance.
Chart 2: Scomi – 7158 (31/03/2010 ~ 21/07/2010)
As indicated by A, price of Scomi breaks above RM0.42 resistance, but failed to closed firmly higher. Therefore, the break out is yet to be confirmed. Nevertheless, the upside biased movement is still intact, since price of Scomi is already above the 14, 21, 31 EMA.
Technically, now that price of Scomi is taking amild consolidation, with low volume, this suggests that the consolidation is a healthy one as no panic selling is sighted. If price should rebound from the 14, 21, 31 EMA, with strong volume, it would form a higher-low, thus an uptrend is formed, and the next resistance is at RM0.46 level while the 14, 21, 31 EMA is still serving as the dynamic support.
| 4 Q Rolling PER | 33.73 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0 % | 0.5 % |
| 31/12/2008 | 0.5 sen | 1.49 % | 5.53% |
| 31/12/2007 | 1.25 sen | 1.10 % | 3.58 % |
| 31/12/2006 | 1.50 sen | 1.49% | 5.37 % |
| 31/12/2005 | 1.20 sen | 1.20 % | 16.19 % |
Table 1:Scomi – 7158, yearly dividend, dividend yield, and net profit ratio.
JCY – 5161: Consolidating.
Chart 3:JCY – 5161 (31/03/2009 ~ 21/07/2010)
After falling from its peak of RM 1.98, price of JCY has been falling for about 3 months and now consolidating in sideways movement. As indicated by A, the Bollinger Bands contracts, as the volatility of price reduces, this suggests that JCY is also preparing for a new movement.
Technically, the consolidation is expected to carry on until the Bollinger Bands re-expands. If the Bollinger Bands should re-expand, with price of JCY above the Bollinger Middle Band, it would be a bullish biased signal. However, if the Bollinger Bands should re-expands with price of JCY below the Bollinger Middle Band, it would be a weak signal and more downside movement is expected. Meanwhile, if JCY should fall below RM1.44, it would be making a new low, and it is a signal to cut loss.
Continue on previous Case Study: E&O – 3417]: Break away from downtrend.
Chart 4: E&O – 3417 (24/12/2009 ~ 21/07/2010)
As indicated by A, price of E&O broke above the L1 downtrend line, breaking away from the downtrend. It touched its peak of RM1.04 before retreated as profit taking took place.
Technically, it is normal to have a retreat of price but provided that it is still supported by the 14, 21, 31 EMA, the uptrend shall remains intact. When price should rebound and form a higher-low, with strong volume, it would means a resumes of an uptrend, and the 14, 21, 31 EMA shall continue serving as the dynamic support as well as a trailing stop reference.
In other words, for those who had bought at the break out of L1 line, it is a good idea to hold the stock, all the way until price should break below the 14, 21, 31 EMA. As for new interested buyers, the ideal entry point would be a higher-low formation, with strong volume. Nevertheless, next resistance is at RM1.02~RM1.03 followed by RM1.07~RM1.10 level.
| 4 Q Rolling PER | 14.94 times | Dividend Yield | 3.82% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/03/2010 | 3.8 sen | 4.29% | 20.12% |
| 31/03/2009 | 0 sen | 0% | -12.45% |
| 31/03/2008 | 5 sen | 2.78% | 24.95% |
| 31/03/2007 | 4 sen | 1.84% | 5.76% |
| 31/03/2006 | 0 sen | 0% | 12.93% |
Table 3: E&O – 3417,yearly dividend, dividend yield, and net profit ratio.
Conclusion:
From the above case studies, it proves that it is a better idea to buy stocks which are trending up or started to trend up after breaking away from its downtrend. If one should buy too early, during a sideways market or a correction, he or she could have bought at the end of a uptrend or a beginning of a downtrend. Buy when the price is up, and apply trailing stop using 14, 21, 31 EMA, it would help investors reduce trading risk.
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