The KLCI had finally broken above 1525 resistance, and marked a historical new high of 1531.99 points. However, the distance between 1531.99 to the 1525 is still insignificant, and therefore, this break out is yet to be confirmed. Nevertheless, the uptrend for the KLCI remains intact, as it is still supported by the 14, 21, 31 EMA dynamic support. If the KLCI should retreat and break below the 14, 21, 31 EMA, what would it do to the other individual stocks?
Gamuda – 5398: Breaking below Ascending Triangle.
Chart 1: Gamuda – 5398 as at 10/11/2010.
As indicated by A, after staying inside a Descending Triangle for about a month, price of Gamuda broke below RM3.80 support, and also breaking below the 14, 21, 31 EMA, and ended its uptrend.
Although the falling was not drastic, it would still create a negative impact to investors for price has been consolidating above RM3.80 before the bearish break out. This suggests that most of these investors who had bought above RM3.80 are all turning their profit into losses, thus creating a negative memory at this level.
Meanwhile, the 14, 21, 31 EMA will be serving as the dynamic resistance for now, and technically, provided that price is still below the falling dynamic resistance, technical outlook shall remains bearish, and there are no buying signal, no matter how low the price is.
As for those investors who had been holding, and already had their trading plan in mind, when price broke below RM3.80, it was a signal to take profit or to cut loss.
| 4 Q Rolling PER | 26.53 times | Dividend Yield | 3.25% |
| Dividend | Dividend Yield | ||
| 31/07/2010 | 12 sen | 3.16% | |
| 31/07/2009 | 8 sen | 2.38% | |
| 31/07/2008 | 25 sen | 9.26% | |
| 31/07/2007 | 46 sen | 5.90% | |
| 31/07/2006 | 16 sen | 4.57% | |
Table 1: Gamuda – 5398, yearly dividend, dividend yield, and net profit ratio.
Lionid – 4235: Remains in uptrend.
Chart 2: Lionid – 4235 as at 10/11/2010.
As shown on chart 2, price of Lionind has been staying above the T1 uptrend, and forming higher-Lows, which suggests that the uptrend is still intact.
However, price of Lionind was resisted by RM2.13~RM2.15 level, and had a technical correction, but it managed to rebound from the 14, 21, 31 EMA, and formed another higher-Low. This is a signal suggesting that the uptrend could continue. However, the upside room is still limited unless the RM2.13~RM2.15 resistance is taken out.
If price should remained resisted by the RM2.13～
RM2.15, and later break below the T1 uptrend line, then it would mark an end to the uptrend. However, this does not mean that it will immediately form a downtrend. Actually, it could be forming a trading range or a sideways movement.If price of Lionind should move sideways or form a trading range, it has to stay above RM1.96, or else, once price breaks below RM1.96, it would create more selling pressure, for it means that all investors who had bought their shares above RM1.96 would be turning their profit into losses. In short, for those who had already bought this share, and if price should remain above the 14, 21, 31 EMA, it is a good idea to hold as long as price is above the 14, 21, 31 EMA. However, if price should break below RM1.93, it is a signal to cut loss or to take profit.
| 4 Q Rolling PER | 3.98 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 2: Lionid – 4235, yearly dividend, dividend yield, and net profit ratio.
Supermx – 7106: Showing weakness again.
Chart 3: Supermx – 7106 as at 10/11/2010.
Although price of Supermx returned to above the 14, 21, 31 EMA on the 19th of October, it was resisted by RM4.80, due to profit taking activities, and later, price failed to stay above the 14, 21, 31 EMA, and therefore, the 14, 21, 31 EMA is once again serving as the dynamic resistance.
As indicated by A, price of Supermx is likely to form a Lower-High, which is a sign of weakness. Support for Supermx is at RM3.75, which is the support of last months strong rebound, and it is going to be an important support level. If price should break below RM3.75, it would be a new low, thus further dampen its sentiment.
Nevertheless, despite the share price is falling, and provided that it is still staying below the 14, 21, 31 EMA, therefore, is no ideal buy signal, and trying to buy cheap could be extremely expensive. Price must form a Higher-low, together with strong volume, then only it is a buy signal.
| 4 Q Rolling PER | 7.16 times | Dividend Yield | 2.55% |
| Dividend | Dividend Yield | ||
| 31/12/2009 | 11 sen | 2.01% | |
| 31/12/2008 | 3.25 sen | 4.06% | |
| 31/12/2007 | 1.9 sen | 0.63% | |
| 31/12/2006 | 6.5 sen | 1.56% | |
| 31/12/2005 | 6.5 sen | 1.46% | |
Table 3: Supermx – 7106, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Despite the KLCI is breaking new high, it is still important that one has to remain alert and always have a contingency or backup plan. A prudent investor shall always consider all the risk factors, before looking for the potential rewards.
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