Revision of last week's case study: Gamuda – 5398: Still trending weak.
Chart 1: Gamuda – 5398 as at 24/11/2010.
As shown on chart 1, price of Gamuda was resisted by the 14, 21, 31 EMA and formed another lower-high. Meanwhile, price is still staying below the T1 downtrend line, and the downtrend is still intact.
Technically, as long as price is still staying below a downtrend line or dynamic resistance, technical outlook shall remain weak. This is because during a downtrend, selling pressure is usually stronger than buying interests, as more people are turning their profit into losses, and some can't even break even.
In fact, for a trader who truly understand technical analysis, he must always respect the trend, and never fight against it. Trying to catch a bottom or bargain hunting is actually an act against the downtrend, and it is a highly risky approach. Nevertheless, support for Gamuda is at RM 3.46.
| 4 Q Rolling PE | 26.24 times | Dividend Yield | 3.29% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/07/2010 | 12 sen | 3.16% | 11.43% |
| 31/07/2009 | 8 sen | 2.38% | 7.10% |
| 31/07/2008 | 25 sen | 9.26% | 13.52% |
| 31/07/2007 | 46 sen | 5.90% | 12.23% |
| 31/07/2006 | 16 sen | 4.57% | 13.74% |
Table 1: Gamuda – 5398, yearly dividend, dividend yield, and net profit ratio.
MMCCorp – 2194: Forming a downtrend channel.
Chart 2: MMCCorp – 2194 as at 24/11/2010.
As shown on chart 2, price of MMCCorp formed a downtrend channel, with T1 line being the downtrend resistance line, and the T2 being a downtrend support. Although T2 is named as a 'support', it is important for a trader to understand that the T1 line is really the foundation of the downtrend, as it outlines the formation of lower-high of price movement; where as, the T2 line is just a 'mirror', thus not significant. If one should failed to realize this, and if he or she should stay buying when price rebound at the T2 line, he or she would be buying into a downtrend, which is a wrong approach.
Nevertheless, as long price of MMCCorp is still trending between the T1 and T2 downtrend channel, the technical outlook for MMCCorp shall remain weak, until a valid break out above the T1 line. Based on the chart analysis, support for MMCCorp is at RM 2.78 and this is a the 50% Fibonacci Retracement line (taking from the lowest of RM2.20 in last 5 months, and its recent peak of RM 3.35)
| 4 Q Rolling PER | 24.89 times | Dividend Yield | 1.06% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 3 sen | 1.22% | 2.80% |
| 31/12/2008 | 2.5 sen | 2.40% | 6.17% |
| 31/12/2007 | 5 sen | 0.54% | 9.64% |
| 31/12/2006 | 9 sen | 2.23% | 13.74% |
| 31/12/2005 | 0.6 sen | 0.30% | 19.74% |
Table 2: MMCCorp – 2194, yearly dividend, dividend yield, and net profit ratio.
RBHCAP – 1066: Still in uptrend.
Chart 3: RBHCAP – 1066 as at 24/11/2010.
As shown on chart 3, price of RHBCA had a technical correction after hitting RM8.19, but it managed to rebound from the 14, 21, 31 EMA, and this suggests that the utprend is still intact. Technically, provided that price is still standing above the 14, 21, 31 EMA, the technical outlook shall remains positive, and trader can choose to hold their shares, as long as they should follow the trailing stop method.
Immediate resistance for RBHCAP is at its recent peak of RM 8.19 and if price could break above this level, it would be making a 13 years new high. Of course, the bullish break out would have to be confirmed with strong volume. If price should resisted by the RM8.19 again, it is likely that it would form an Ascending Triangle; or, if price should break below the 14, 21, 31 EMA, the uptrend would be affected, and if later price should form a lower-high, it would be a first sign of a downtrend formation. Other than the 14, 21, 31 EMA dynamic support, the next support for RHBCAP is at RM 7.70.
| 4 Q Rolling PER | 12.7 times | Dividend Yield | 2.81% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 22.45 sen | 4.25% | 22.14% |
| 31/12/2008 | 19.6 sen | 5.03% | 17.48% |
| 31/12/2007 | 13.6 sen | 3.66% | 21.44% |
| 31/12/2006 | 8 sen | 2.34% | 7.96% |
| 31/12/2005 | 3.5 sen | 1.58% | 8.63% |
Table 3: RBHCAP – 1066, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
As the KCLI or the broad market is having a technical correction, investors or traders should take caution, and not to simply buy on dip, or worst, average down. One should always honor his own trading or cut loss plan.
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