Lionind – 4235: Uptrend intact.
Chart 1: Lionind – 4235 as at 20/10/2010.
As shown on chart 1, after breaking above the 14, 21, 31 EMA in July, price of Lionind has been staying in its uptrend, although the speed of the uptrend was rather slow.
As indicated by A, Lionind is currently testing the RM2.00 resistance level, and this is a new high level for 4 months. Despite breaking above the RM2.00 by margin on the 19th of October, profit taking has pulled back its price, and as a result, it failed to stay above the RM2.00 level. However, as long as price should stay above the 14, 21, 31 EMA, the uptrend shall remains intact.
In other words, as long as price of Lionind is still above the 14, 21, 31 EMA, it is a good idea to hold, until price should break below the 14, 21, 31 EMA, it would be a signal to take profit, or to cut loss. If price should break above the RM2.00 resistance, the next resistance is at RM2.50.
| 4 Q Rolling PER | 4.02 times | Dividend Yield | 0.49% |
| Dividend | Dividend Yield | ||
| 30/06/2010 | 1 sen | 0.61% | |
| 30/06/2009 | 1 sen | 0.80% | |
| 30/06/2008 | 1 sen | 0.38% | |
| 30/06/2007 | 1 sen | 0.57% | |
| 30/06/2006 | 0.5 sen | 0.52% | |
Table 1: Lionind – 4235, yearly dividend, dividend yield, and net profit ratio.
Bursa – 1818: Sharp Correction.
Chart 2: Bursa – 1818 as at 20/10/2010.
Although Bursa- 1818 is not a KLCI component, it is also considered as one of the blue chips, and therefore, when the KLCI is resisted by 1500 mark, price of Bursa also retreated, in fact, rather sharply. In 1 week, price of Bursa has fallen RM0.46 or 5.8%, and this is a biggest fall since July.
As price retreated sharply, it broke below the 14-day EMA, thus threatening the sustainability of the uptrend. Therefore, investors should watch out of the formation of a lower-high, because it is a clue of a downtrend reversal.
A lower-high means any rebound of price later, but failing to return to its previous high of RM8.66. If price should form another high, (lower than RM8.66), it would be a first signal suggesting a possible trend reversal. If price should later break below the 14, 21, 31 EMA, it would be another signal suggesting negative outlook, thus the risk of a downtrend formation would be high.
| Leading PER | 24.63 times | Dividend Yield | 2.29% |
| Dividend | Dividend Yield | ||
| 31/12/2009 | 19.1 sen | 2.46% | |
| 31/12/2008 | 24.3sen | 4.72% | |
| 31/12/2007 | 85 sen | 5.94% | |
| 31/12/2006 | 54.5 sen | 6.77% | |
| 31/12/2005 | 20 sen | 5.46% | |
Table 2: Bursa – 1818, yearly dividend, dividend yield, and net profit ratio.
Revision of last week's Case Study: CIMB – 1023: Breaking below dynamic support.
Chart 3: CIMB – 1023 as at 20/10/2010.
As indicated by A, price of CIMB breaks below 14, 21 ,31 EMA, violating the uptrend support. As a result, the 14, 21, 31 EMA is now serving as the dynamic resistance for CIMB. By right, those who have been holding should be taking profit when price dropped below the 14, 21, 31 EMA, to honor their trading plan and trailing stop method.
Technically, provided that price of CIMB is still below the 14, 21, 31 EMA, the technical outlook shall remains bearish bias. No matter how low the price could be, there is no ideal buy signal until a formation of a higher low, preferably above the 14, 21, 31 EMA.
If price should break above the 14, 21, 31 EMA, and later form a higher-low, with strong volume, then it would be an ideal buy signal. And immediately after buying, investors or trader should apply the 14, 21, 31 EMA as a trailing stop reference.
| 4 Q Rolling PER | 9.93 times | Dividend Yield | 2.34% |
| Dividend | Dividend Yield | ||
| 31/12/2009 | 18.5 sen | 1.46% | |
| 31/12/2008 | 25 sen | 4.27% | |
| 31/12/2007 | 25 sen | 2.27% | |
| 31/12/2006 | 15 sen | 1.94% | |
| 31/12/2005 | 15 sen | 2.63% | |
Table 3: CIMB – 1023, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
With the KLCI resisted by the 1500 level, many KLCI components were having technical correction, but most of their uptrend remains intact. However, trying to “buy on dip” is a risky method. Therefore, an investor should straightly follow his trading plan.
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