Maybank - 1155: Over-heated.
Chart 1: Maybank - 1155 (28/04/2010 ~ 18/08/2010 )
As shown on chart 1, price of Maybank broke above the Bollinger Middle Band on the 16th of August, and had a sharp rally, touching the RM8.00 height, making a new high since the 5th of March. As circled at A, with price of Maybank breaking above the 20-day Bollinger Upper band, this suggests that the short term movement of Maybank is over-heated.
Technically, it is not a good level to buy when the stock price is over-heated. This is because when a stock price rally is over-heated, there will be profit taking activities to pull down the price, called pull back effect, which is a form of a technical correction. However, this does not mean that the uptrend is over, it is merely a short term correction or a consolidation.
If price of Maybank should consolidate above the 14, 21, 31 EMA, or the Bollinger Middle Band, this suggests that the uptrend is still intact, and therefore, for investors who had bought their this share, it is a good idea to hold on to their position. As for investors who are interested to take up any position, the ideal entry point would be a formation of higher-low above the 14, 21, 31 EMA, with strong volume. However, immediately after buying, investors should apply the 14, 21, 31 EMA as a trailing stop reference. Immediate resistance for Maybank is at RM8.00 while the next resistance is seen at RM9.00.
| 4 Q Rolling PER | 34 times | Dividend Yield | 1% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/06/2009 | 8 sen | 1.36 % | 3.93% |
| 30/06/2008 | 52.5 sen | 7.45 % | 18.13% |
| 30/06/2007 | 80 sen | 6.67 % | 20.95 % |
| 30/06/2006 | 85 sen | 7.94 % | 22.07 % |
| 30/06/2005 | 102.5 sen | 9.4 % | 22.31 % |
Table 1: Maybank - 1155, yearly dividend, dividend yield, and net profit ratio.
Genting – 3182: Expected a Pull-back effect.
Chart 2: Genting – 3182 (28/04/2010 ~ 18/08/2010)
As circled by A, price of Genting broke above the 20-day Bollinger Upper Band after 3 consecutive sharp rally. Technically, when a stock rallied, breaking above and entirely away of the 20-day Bollinger Upper band, it is a sign of an over-heated condition, thus implying that a pullback effect is likely to take place in the near future, as a form of a technical correction.
Although a pullback is expected, the uptrend of Genting is unaffected, as it is still supported by the 14, 21, 31 EMA dynamic support. In other words, for investors who had bought this share, it is a good idea to hold on the position provided that the stock price is still above the 14, 21, 31 EMA, until price should break below the 14, 21, 31 EMA, then it is a signal to cut loss or to take profit.
As for investors who are interested in taking up position on Genting, an ideal buy signal would be a formation of a higher-low after the pullback effect, and the higher lower formation should be above the 14, 21, 31 EMA, together with a strong volume. After buying, he or she shall apply the 14, 21, 31 EMA as the trailing stop reference immediately. Nonetheless, resistance for Genting is seen at RM 9.00 level.
| 4 Q Rolling PER | 30.82 times | Dividend Yield | 0.81 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 7.2 sen | 1.14 % | 11.74% |
| 31/12/2008 | 7 sen | 1.89 % | 6.27% |
| 31/12/2007 | 37 sen | 0.98 % | 12.15% |
| 31/12/2006 | 32 sen | 0.97% | 21.66% |
| 31/12/2005 | 29 sen | 1.36 % | 22.86% |
Table 2: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.
AMMB – 1015: Uptrend, over-heated.
Chart 3: AMMB – 1015 (28/04/2010 - 18/08/2010)
As circled at A, price of AMMB had a sharp rally, breaking above the 20-day Bollinger upper band, and signaled an over-heated condition, as the stock price of AMMB is totally away from the 20-day Bollinger Upper band. Generally, investors are likely to take profit and the profit taking activities could lower the stock price as a pullback effect.
Despite the over-heated condition, the uptrend of AMMB remains intact, and a pullback effect is only a form of technical correction, or a beginning of a consolidation. Provided that price of AMMB is still supported by the 14, 21, 31 EMA, with strong volume, the uptrend is expected to resume. However, if price of AMMB should break below the 14, 21, 31 EMA after the pullback effect, it would be a signal suggesting that the uptrend is violated. Nevertheless, resistance for AMMB is at RM5.50~RM5.55, while the support is at the 14, 21, 31 EMA dynamic support.
| 4 Q Rolling PER | 14.69 times | Dividend Yield | 1.91 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/03/2009 | 10.5 sen | 2.10 % | 14.77% |
| 31/03/2008 | 8 sen | 3.07 % | 14.69% |
| 31/03/2007 | 6 sen | 1.74 % | 11.13% |
| 31/03/2006 | 5 sen | 1.33 % | -3.38% |
| 31/03/2005 | 4 sen | 1.77 % | 7.34% |
Table 3: AMMB – 1015, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Whenever a stock price breaks above the 20-day Bollinger Upper Band (especially for blue chip counters), it is a sign of an over-heated condition, suggesting that a pullback effect is likely to take place in the near future as a form of a technical correction. However, this does not mean that the uptrend will be violated. If the stock price should consolidate after the pullback or rebound from the dynamic support, the uptrend is still unaffected.
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