TGOFFS – 7228: Testing 15 months new high.
Chart 1: TGOFFS – 7228 (21/04/2010 ~ 11/08/2010 )
As shown on chart 1, TGOFFS broke above the 14, 21, 31 EMA on the 31st of May, and since then, it has been trendind up, gaining up to RM0.65 or 60%. During this uptrend, the 14, 21, 31 EMA was firmly supporting price of TGOFFS and therefore, the 14, 21, 31 EMA is still the dynamic support as well as the trailing stop reference for TGOFFS.
Currently, price of TGOFFS is resisted by RM17.20 level, and this is also a peak on the 12th of June, 2009. Therefore, this is likely to be a strong resistance level, for the negative memory of this level for most investors are still intact.
Nevertheless, for investors who are holding and already making profit, it is a good idea to hold on to the position as long as price of TGOFFS is still supported by the 14, 21, 31 EMA. If price should break below the 14, 21, 31 EMA, it would be a signal to take profit or to cut loss. As for investors looking to take up new position, he or she would have to wait until a formation of a higher-low with strong volume, then if they should buy based on the above formation of higher-low, they should apply the 14, 21, 31 EMA as a trailing stop reference immediately.
| Leading PER | 33.61 times | Dividend Yield | 1.56% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0 % | 0.75% |
| 31/12/2008 | 6 sen | 6.52 % | 5.57% |
| 31/12/2007 | 0 sen | 0 % | 5.47 % |
| 31/12/2006 | 3 sen | 1.01 % | 6.23 % |
| 31/12/2005 | 3 sen | 1.52 % | 7.83 % |
Table 1: TGOFFS – 7228, yearly dividend, dividend yield, and net profit ratio.
Sime – 4197: Downtrend, testing important support.
Chart 2: Sime – 4197 (21/04/2010 ~ 11/08/2010)
Despite the KLCI started picking its strength after the world cup, Sime, on the other hand, was trending lower. Currently, price of Sime is testing the RM7.50 support level. If price should break below this level, it would be making a 13 months new low, which means those investors who have bought Sime within this 13 months and are still holding their shares, would be making a loss, or turning their profit into losses, regardless of their entry level. Thus it would create more selling pressure as all these investors are making losses, with the intention to break-even.
Technically, provided that the price is below the 14, 21, 31 EMA, the technical outlook shall remains weak. An ideal buy signal would be a break out above the 14, 21, 31 EMA, and later forming a higher low above the 14, 21, 31 EMA with strong volume. Nonetheless, if price of Sime should break below RM7.50, the next support is at RM7.00.
| 4 Q Rolling PER | 22.55 times | Dividend Yield | 2.67 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/06/2009 | 20.30sen | 2.92 % | 7.35% |
| 30/06/2008 | 49.00 sen | 5.30 % | 10.32% |
| 30/06/2007 | 30.20 sen | 3.15 % | 7.26% |
| 30/06/2006 | 30.00 sen | 5.45% | 5.56% |
| 30/06/2005 | 26.00 sen | 4.48 % | 4.30% |
Table 2: Sime – 4197, yearly dividend, dividend yield, and net profit ratio.
Revision of last week's case study: Kinstel – 5060: Pullback and testing dynamic support.
Chart 3: Kinstel – 5060 (21/04/2010 - 11/08/2010)
As shown on chart 3, price of Kinstel broke above the RM0.865 resistance level on the 2nd of August, but it met its new resistance at RM0.935~RM0.93 level. Then, price retreated as investors took profit, and now testing the 14, 21, 31 EMA. Technically, if price could rebound from the 14, 21, 31 EMA, it would form a higher-low, thus the uptrend could resume.
During this correction, volume traded on Kinstel were lower, compared to its rally, thus suggesting that the profit taking was rather mild, and there were no panic selling activities. Investors should follow their trading plan by using the 14, 21, 31 EMA as a trailing stop reference, and if price should break below the 14, 21, 31 EMA, it would be a signal to take profit.
As for those who are interested in taking up new positions, an ideal buy signal would be a formation of a higher-low with strong volume, in which price should rebound above the 14, 21, 31 EMA. And upon buying, he or she should apply the 14, 21, 31 EMA as a trailing stop level.
| 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 3: Kinstel – 5060, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
In conclusion, due to the technical correction of the KLCI, many counters were affected. However, to sustain a healthy uptrend, a reasonable correction is needed after a strong rally. This is because corrections will “wash out” selling pressure from profit taking and it will provide rooms for more upside gains.
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