MYEG – 0138: Weakening after a consolidation.
Chart 1: MYEG – 0138 (21/04/2010～11/08/2010)
As shown on chart 1, price of Myeg entered a consolidation stage, with the Bollinger Bands contracting. Technically, when t he Bollinger Bands contract, it does not only suggests a consolidation but also implying that a new movement is being conceived, but only the Bollinger Bands should re-expand, then we shall identify the direction of the new movement.
As indicated by A, the Bollinger Bands re-expanded after contracted for a period, this suggested an end to the consolidation and a beginning of a new movement. Unfortunately, price of Myeg fell below the Bollinger Middle Band when the Bollinger Bands expands, thus giving a bearish signal. If the Bollinger Bands should continue to expand while the price is still below the Bollinger Middle Band, more downside movement is likely. Thus investors should take caution with this signal. Nevertheless, support for Myeg is at RM0.70 and the resistance are at the Bollinger Middle Band as well as RM0.80.
| 4 Q Rolling PER | 22.97 times | Dividend Yield | 2.48% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/06/2009 | 1.82 sen | 4.18 % | 32.77 % |
| 30/06/2008 | 2 sen | 2.21 % | 29.99% |
| 30/06/2007 | 0 sen | 0 % | 27.71 % |
| 30/06/2006 | 0 sen | 0 % | 31.07 % |
Table 1: MYEG – 0138, yearly dividend, dividend yield, and net profit ratio.
Timecom – 5031: Consolidating in an uptrend.
Chart 2: Timecom – 5031 (21/04/2010～ 11/08/2010)
As shown on chart 2, price of Timecom returned to its uptrend after breaking above the 14, 21, 31 EMA on the 9th of July. Until now, it has gained up to RM0.27 or 59%. During this rally, price was firmly supported by the 14, 21, 31 EMA, which serves as the dynamic support.
Although the uptrend is still intact, price retreated after it found a resistance at RM0.725. When price is having a correction, the target would be at the 14, 21, 31 EMA. If price could rebound from the 14, 21, 31 EMA again, then there is a good chance that the uptrend would resume by forming another higher-low, which is an important characteristic of an uptrend.
On the other hand, if price should break below the 14, 21, 31 EMA after this correction, it would break the uptrend, thus a signal to take profit. Nevertheless, due to the poor fundamental of Timecom, this counter is quite speculative in nature, thus not suitable for conservative and in-experienced investors. Support for Timecom remains at the 14, 21, 31 EMA, while the next support is at RM0.60.
| 4 Q Rolling PER | 18.71 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0% | 11.54 % |
| 31/12/2008 | 0 sen | 0% | -331.43% |
| 31/12/2007 | 0 sen | 0% | -53.37 % |
| 31/12/2006 | 0 sen | 0% | -53.01% |
| 31/12/2005 | 0 sen | 0% | -51.94% |
Table 2: Timecom – 5031, yearly dividend, dividend yield, and net profit ratio.
Revision of Last week's Case Study: Ranhill – 5030: Correction in an uptrend.
Chart 3: Ranhill – 5030 (21/04/2010～11/08/2010)
As shown on chart 3, price of Ranhill touched its recent high of RM0.875, but due to profit taking activities, price of Ranhill was pulled back, and now testing the 14, 21, 31 EMA dynamic, as indicated by A. This is an important support level.
If price could rebound from the 14, 21, 31 EMA, with strong volume, then there is a good chance that the uptrend could resume, and the 14, 21, 31 EMA shall continue serving as the dynamic support. Then, it is a good idea to hold on to this stock, provided that the uptrend is still intact.
On the other hand, if price should fall below the 14, 21, 31 EMA, then the uptrend would have been violated, and it would be a signal to take profit or to cut loss, so that investors could avoid being trapped by the downtrend. Support for Ranhill is at RM0.77 while the resistance is at RM0.875.
| 4 Q Rolling PER | 1.81 times | Dividend Yield | 1.28% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/6/2009 | 1 sen | 1.10% | 10.29% |
| 30/6/2008 | 0 sen | 0% | -36.75% |
| 30/6/2007 | 0 sen | 0% | 7.92% |
| 30/6/2006 | 1.5 sen | 1.16% | -0.89% |
| 30/6/2005 | 1.5 sen | 1.19% | 2.22% |
Table 3: Ranhill – 5030, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
The Bollinger Bands and the 14, 21, 31 EMA are both primary indicators, and it is used extensively for their reliability. However, investors should know their strength and weakness, and when to apply one or the other.
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