IOIcorp – 1961: Preparing for a new movement.
Chart 1: IOIcorp – 1961 (14/04/2010 ~ 05/08/2010 )
As indicated by A, price of IOI has been moving sideways, in its consolidation stage. As it is moving sideways, the fluctuation is getting narrower, thus the Bollinger Bands contracted, confirming the consolidation signal. Other than showing a consolidation signal, the contraction of the Bollinger Bands also implies that IOI is now preparing for a new movement, and the direction of the new movement shall only be revealed once the Bollinger Bands re-expanded.
If the Bollinger Bands should re-expand, it would mark an end to the consolidation and a beginning of a new movement. If price of IOI should remain above the Bollinger Middle Band as the Bollinger Bands expands, it would be a bullish biased signal. Otherwise, if price of IOI should stay below the Bollinger Middle Band, as the Bollinger Bands expands, it would be a bearish biased signal. Thus a signal to cut loss. Nevertheless, immediate support for IOI is seen at RM5.00 while the resistance are at RM 5.40 followed by RM5.40.
| 4 Q Rolling PER | 15.74 times | Dividend Yield | 1.56% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/6/2009 | 8 sen | 1.69 % | 6.74 % |
| 30/6/2008 | 17 sen | 2.28 % | 15.22% |
| 30/6/2007 | 7 sen | 1.35 % | 16.55 % |
| 30/6/2006 | 43.5 sen | 3.04 % | 13,81 % |
| 30/6/2005 | 35 sen | 3.33 % | 14.86 % |
Table 1: IOIcorp – 1961, yearly dividend, dividend yield, and net profit ratio.
Kinstel – 5060: Breakout from consolidation, might be forming an uptrend.
Chart 2: Kinstel – 5060 (14/04/2010 ~ 05/08/2010)
As shown on chart 2, price of Kinstel was consolidating below RM0.86 for about 2 months, with low volume, suggesting that the buying interests was low, until price broke above RM0.86 level, volume increased significantly, implying some increased of buying interests.
As indicated by A, as it break above RM0.86 resistance, breaking away from the consolidation, with strong volume, this suggests that new inflow of capital, with buyers taking selling price, thus giving a sign of an uptrend formation.
Although price pulled back soon after breaking above RM0.86, it is rather normal. Technically, as long as price should stay above the 14, 21, 31 EMA, the uptrend is still intact. With the price of Kinstel forming a higher-low, with strong volume, the uptrend is set to continue, if other external conditions are unchanged. Next resistance for Kinstel is seen at RM0.96 followed by RM 1.00.
| 4 Q Rolling PER | 11.35 times | Dividend Yield | 1.09 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 1 sen | 1.01 % | 0.95% |
| 31/12/2008 | 1.7 sen | 4 % | 1.52% |
| 31/12/2007 | 1.7 sen | 1.27 % | 6.38% |
| 31/12/2006 | 7.5 sen | 4.6 % | 35.60% |
| 31/12/2005 | 5 sen | 5.49 % | 3.57% |
Table 2: Kinstel – 5060, Yearly dividend, dividend yield, and net profit ratio.
Revision of Last week's Case Study: E&O – 3417: Technical correction after over-heated.
Chart 3: E&O – 3417 (14/04/2010-05/08/2010)
As shown on chart 3, price of E&O touched RM1.29 last week, and that was the height since 20th of Oct, 2009. However, profit taking pushed the price down, as a form of technical correction. Fortunately, the retreat was rather mild and it is still still staying above the 14, 21, 31 EMA, dynamic support. This shows that the overall uptrend is still intact.
Technically, the most ideal correction is the low fluctuation, sideways movement. This is because when price is moving sideways, the selling pressure is not high and at the same time, it attracts new buyers. In short, if price should move sideways for a short period, it is usually a healthy correction.
If price should rebound from the 14, 21, 31 EMA, after the correction, and form another higher-low, with strong volume, it would be a buy signal. If investor should follow this buy signal, he or she shall take the 14, 21, 31 EMA as the trailing stop reference. If price should stay above the 14, 21, 31 EMA, it is a good idea to hold. But if price should break below 14, 21, 31 EMA, it would be a signal to take profit or to cut loss. Next resistance are found at RM1.29~RM1.30 followed by RM1.40~RM1.41.
| 4 Q Rolling PER | 18.17 times | Dividend Yield | 3.14% |
| 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:
It is perfectly normal to see a correction after a rally, but as long as the price could stay above the 14, 21, 31 EMA, the uptrend shall remains intact. Therefore, investors who wish to trend a trend, should take the 14, 21, 31 EMA as the trailing stop reference.
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