JCY – 5161: New Low.
Chart 1: JCY – 5161 (07/04/2010～28/07/2010)
As shown on chart 1, price of JCY fell below its lowest RM1.44 level, breaking a new low. As indicated by A, the 14, 21, 31 EMA is now serving as the dynamic resistance for JCY, it is in downtrend.
Technically, when price break new low, it means that all investors who had bought and are still holding their share are all making losses, even for those who bought at the lowest price. Therefore, with so many losers holding their shares, the emotion of fear is stronger, as most of these share holders wants to break even, thus the selling pressure for a new low stock is usually very high.
Nevertheless, since JCY is making a historical new low, we can't find a reliable support at the moment, until a valid rebound. But provided that price is still resisted by the 14, 21, 31 EMA, the downtrend remains intact, and the technical outlook remains bearish biased.
KPJ – 5878: Still in uptrend.
Chart 2: KPJ – 5878 (07/04/2010～28/07/2010)
As shown on chart 2, KPJ price has returned to above the 14, 21, 31 EMA since 27th of May, and until now, it is still trending in uptrend. Although, in the end of June, price retreated as a technical correction, it managed to rebound from the 14, 21, 31 EMA, and later resume its uptrend, even breaking above the RM3.45 resistance and marked a new high.
As indicated by A, it tested its high on the 23rd of July, at RM3.85. Generally, the first target of the correction is at the 14, 21, 31 EMA, and if price should rebound from the 14, 21, 31 EMA, it would resume its uptrend, and as long as the uptrend is still intact, it is a good idea to hold on the the positions.
As for investors who are looking for buy signal, an ideal entry signal would be the next higher-low, and after taking the position, it is crucial to apply the 14, 21, 31 EMA as a trailing stop reference. Nonetheless, the immediate resistance is at RM3.85.
| 4 Q Rolling PER | 8.32 times | Dividend Yield | 5.51% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 20 sen | 8.3 % | 7.04 % |
| 31/12/2008 | 7 sen | 2.75 % | 6.18 % |
| 31/12/2007 | 19.59 sen | 5.66 % | 6.70 % |
| 31/12/2006 | 14 sen | 7 % | 5.08 % |
| 31/12/2005 | 8 sen | 5.30 % | 5.30 % |
Table 2: KPJ – 5878, yearly dividend, dividend yield, and net profit ratio.
Revision of Last Week's Case Study: Zelan – 2283: Technical Correction.
Chart 3: Zelan – 2283 (07/04/2010～28/07/2010)
As shown on the chart 3, after breaking above 14, 21, 31 EMA in early July, price of Zelan has been trending up, even breaking above the L1 downtrend line, and formed an uptrend, with the 14, 21, 31 Ema serving as the dynamic support.
As indicated by A, after breaking L1 downtrend, it hit its peak of RM0.71, and started to fall back as profit taking kicked in. Technically, it is rather normal, and the first target of the correction is at the 14, 1, 31 EMA. If price should rebound from the 14, 21, 31 EMA, it would form another higher low, thus a good chance to resume this uptrend. Of course, a strong volume is needed to confirm the uptrend. Therefore, it would be an ideal buy signal, with the 14, 21, 31 EMA as the trailing stop reference.
In other words, provided that the stock price is supported by the 14, 21, 31 EMA, it is a good idea to hold on to the positions, until which price should break below the 14, 21, 31 EMA, it would be a signal to take profit. Next resistance of Zelan is seen at RM0.81~RM0.82.
| 4 Q Rolling PER | 0 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/3/2010 | 0 sen | 0% | -24.77% |
| 31/3/2009 | 5 sen | 8.93% | -7.33% |
| 31/3/2008 | 14 sen | 6.76% | -1.30% |
| 31/3/2007 | 15 sen | 1.88% | 12.60% |
| 31/3/2006 | 10 sen | 2.96% | 14.47% |
Table 3: Zelan – 2283, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
The above case studies proved again, that buying on the uptrend is very important. However, most investors are still subscribed to the average idea, that buying a stock should be at a lower price, thus limiting themselves in choosing counters at very low price, or a counter in downtrend. In short, selling pressure is higher in a downtrend stock, thus the risk is higher.
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