Revision of Last week's case study: Scomi – 7158: Testing the T1 downtrend line.
Chart 1: Scomi - 7158]（23/02/2010～16/06/2010）
As indicated by A, Scomi is still testing the T1 downtrend, and it is likely that it would break away from the T1 downtrend line. However, it has not broken above the 14, 21, 31 EMA (Exponential Moving Average) thus the technical outlook shall remains weak.
Technically, if Scomi should consolidate sideways, which is an improvement if compared to the T1 downtrend condition. Therefore, it is easier to rally after a sideways consolidation, this is because when stock is trading at a sideways movement, there were not many losers, thus the fear is not strong. But still, strong volume is needed to push price higher.
Nevertheless, since it has not shown any bullish signal, traders and investors should wait patiently for the signal and avoid buying too early. Technically, if price should break above the 14, 21, 31 EMA with strong volume, it would be a positive signal to buy, and the 14, 21, 31 EMA would be serving as a dynamic support as well as a trailing stop reference. Immediate support for Scomi is at RM0.375 while the resistance is at RM0.45～RM0.46.
| 4 Q Rolling PER | 31.35 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0% | 0.5% |
| 31/12/2008 | 0.50 sen | 1.49% | 5.53% |
| 31/12/2007 | 1.25sen | 1.10% | 3.58% |
| 31/12/2006 | 1.50sen | 1.49% | 5.37% |
| 31/12/2005 | 1.20sen | 1.20% | 16.19% |
Table 1: Scomi – 7158, yearly dividend, dividend yield, and net p
rofit ratio.
Zelan – 2283: Still in long term downtrend.
Chart 2:Zelan – 2283 (08/6/2009～16/06/2010)
As shown on chart 2, price of Zelan rebounded from RM0.445, but still remains below the T1 downtrend line. Therefore, technically, the downtrend remains intact. Technically, price has to break above the 14, 21, 31 EMA with strong volume in order to show some strength, then price has to break above the T1 line to break away from the downtrend. Therefore, any rebound below the T1 downtrend is only a technical rebound, and not yet a reversal.
However, since price is now further below the T1 downtrend line, some traders might want to take advantage of the technical rebound as a short term trading. However, it is important to watch out for the T1 line, and if price should retreat at the T1 line, it is a signal to take profit. Short term trading is generally a high risk trading method, and not suitable for inexperienced traders nor conservative investors. Nevertheless, support for Zelan is at RM0.445 while the resistance is at RM0.60 WinChart Automatic Fibonacci Retracement.
| 4 Q Rolling PER | 0 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/03/2010 | 0 sen | 0 % | -24.77 % |
| 31/03/2009 | 5 sen | 8.93 % | -7.33 % |
| 31/03/2008 | 14 sen | 6.76 % | -1.30 % |
| 31/03/2007 | 15 sen | 1.88 % | 12.60 % |
| 31/03/2006 | 10 sen | 2.96 % | 14.47 % |
Table 2:Zelan - 2283, yearly dividend, dividend yield, and net profit ratio.
TA – 4898 : Breaking away from the Downtrend, still waiting for uptrend condition.
Chart 3: TA – 4898 (23/11/2009～16/06/2010)
As indicated by A, price of TA rebounded at RM0.62 level, breaking above the 14, 21, 31 EMA as well as the T1 downtrend line.
Although TA has broken above the T1 line, it has not shown a reversal yet. Technically, after breaking above the T1 line, if price should retreat, the volume has to be low, this suggests that the selling pressure is not huge. Then, price would have to form a higher low with strong volume, suggesting some inflow of fresh buying interests, and the 14, 21, 31 EMA would be serving as a trailing stop reference.
The above mentioned conditions are the most ideal technical condition of a reversal, and if the broad market sentiment should improve, the reversal would be more assure. Again, it is important to wait for all the conditions before taking up any position. Immediate support for TA is at RM0.62 and the next resistance is at RM 0.705～RM0.71.
| 4 Q Rolling PER | 12.43 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/1/2010 | 0 sen | 0% | 20.89% |
| 31/1/2009 | 4.5 sen | 7.32 | 16.94% |
| 31/1/2008 | 10 sen | 7.94% | 41.33% |
| 31/1/2007 | 7 sen | 7.95% | 36.94% |
| 31/1/200 | 3 sen | 6.34% | 25.54% |
Table 3: TA – 4898, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Volume is an important factor of a rally. When volume increases, it suggests that the inflow of fresh capital is increasing. If price should rally with strong volume, it means that new buyers are taking the seller's price, and sellers are selling with premium. Therefore, if this condition remains, an uptrend will form.
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