Revision of Last Week's Case Study: DRBHCOM – 1619: Short term over-heated.
Chart 1: DRBHCOM – 1619 as at 08/12/2010.
As shown on chart 1, after breaking above the RM1.30 resistance again, price of DRBHCOM resumes its uptrend, and at the same time, the rally is being supported by the 14, 21, 31 EMA. However, as indicated by A, price of DRBHCOM is breaking above the 20-day Bollinge Upper Band, and this suggests that the short term movement is indeed very strong, but it is showing over-heating condition.
Technically, if price should rally too quickly and break above the 20-day Bollinger Upper Band, it is an over-heated signal, as investors are likely to take profit, and as a result, a pull-back is likely to take place in the near future.
Nevertheless, despite a chance of a pull-back, the over-heated condition is rather normal. As long as the price of DRBHCOM is still supported by the 14, 21, 31 EMA after the possible pull-back effect, it is still a good idea to hold as the uptrend is still intact. Of course, if one should feel uncomfortable with the over-heated signal, he or she could consider taking profit partially, by selling 1/3 of the position. Next resistance for DRBHCOM is at RM1.88 while the support remains at 14, 21, 31 EMA dynamic support.
| 4 Q Rolling PER | 5.03 times | Dividend Yield | 2.35% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/03/2010 | 4 sen | 4.12% | 7.48% |
| 31/03/2009 | 15.83 sen | 22.94% | 10.83% |
| 31/03/2008 | 5 sen | 3.94% | 7.27% |
| 31/03/2007 | 3.5 sen | 1.79% | 3.27% |
| 31/03/2006 | 2 sen | 1.39% | -5.79% |
Table 1: DRBHCOM – 1619, yearly dividend, dividend yield, and net profit ratio.
IJMLand – 5215: Technical correction in an uptrend.
Chart 2: IJMLand – 5215 as at 08/12/2010.
As shown on chart 2, price of IJMLand has recently high its high of RM 3.25, but as investors begun to take profit, it causes the price to pull back and consolidated. However, as price of IJMLand was consolidating, it was still supported by the 14, 21, 31 EMA dynamic support, and this suggests that the uptrend is still intact.
As indicated by A, although price of IJMLand was supported by the 14, 21, 31 EMA, it has failed to return to its recent high of RM3.25, and it is possible to form a lower-high. But as long as it is still supported by the 14, 21, 31 EMA, it is too soon to call for any reversal.
In other words, investors should take caution at this situation, and honor their original trading plan. If price should later break below the 14, 21, 31 EMA, then the uptrend would be affected, and if one should feel uncomfortable, he or she could take profit partially.
However, we can determine that if price of IJMLand would immediate turn into a downtrend if the 14, 21, 31 EMA is violated, and don't forget that there is a good chance that price of IJMLand would prolong its sideways consolidation, which will result in price breaking below the 14, 21, 31 EMA. Immediate resistance for IJMLand is at RM3.25, as for the support, it is seen at RM 2.70.
| 4 Q Rolling PER | 26.65 times | Dividend Yield | 0.67% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/03/2010 | 2 sen | 0.97% | 9.87% |
| 31/03/2009 | 0 sen | 0.00% | 7.62% |
| 31/03/2008 | 0 sen | 0.00% | 14.13% |
| 31/03/2007 | 0 sen | 0.00% | -2.76% |
| 31/03/2006 | 0 sen | 0.00% | 9.07% |
Table 2: IJMLand – 5215, yearly dividend, dividend yield, and net profit ratio.
GAB – 3255: Firmly on uptrend.
Chart 3: GAB – 3255 as at 08/12/2010. (Weekly Chart)
As shown on chart 3, price of GAB remains in its long term uptrend, and even breaking new high. The 14, 21, 31 Weekly EMA shown on chart is the long term dynamic support for GAB.
Generally, a weekly chart is suitable for stocks that has a lower volatility, and longer term trend.If stock like GAB is analyzed using daily chart, there would be many whipsaws, or false signal, and as a result, the analysis will be less effective. Especially those counters which pay out high dividend, one wish to hold their trend for as long as possible.
Based on the fundamental of GAB, we can safely say that this is a high yield stock, and therefore, it is one of the good choices for long term investment. If price of GAB should stay in an uptrend, then the only logic thing to do it so hold while collecting the regular dividend. Technically, as long as price of GAB could stay above ethe 14, 21, 31 Weekly EMA, the uptrend shall remains intact.
| 4 Q Rolling PE | 18.20 times | Dividend Yield | 4.54% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/06/2010 | 45 sen | 5.56% | 11.24% |
| 30/06/2009 | 41 sen | 6.72% | 11.05% |
| 30/06/2008 | 44 sen | 8.38% | 10.54% |
| 30/06/2007 | 45 sen | 7.63% | 10.50% |
| 30/06/2006 | 42 sen | 7.71% | 13.13% |
Table 3: GAB – 3255, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
The improvement of the KLCI technical outlook has lifted many individual counters performance, as well as the overall market sentiment. But as for those that are now over-heated, a chance of some profit taking is high, thus investors are advised to follow their own trading and cut loss plan with caution.
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