Revision of Last week's Case Study: JCY - 5161: New Low again.
Chart 1: JCY - 5161 (11/05/2010 ~ 01/09/2010 )
As shown on chart 1, price of JCY is still falling, and breaking another historical new low, thus the downtrend remains intact and the 14, 21, 31 EMA is still serving as the dynamic resistance. Technical outlook for JCY is bearish.
As indicated by A, when price falls, volume increased significantly, this suggests that the selling pressure was high and seller rushed to sell off their share to new buyers whom are only willing to take up position at a lower price.
In short, heavy volume during a downtrend will further dampen the bearish sentiment on this counter, thus investors are urged not to try to catch the bottom, despite the falling of price, which appears to be cheap. Since price is breaking new low, no valid support is seen right now.
| Leading PER | 6.9 times | Dividend Yield | 0% |
| Dividend | Earning Per Share | ||
| 30/06/2009 | 0 sen | 2.72 sen | |
| 31/03/2009 | 3.91 sen | 3.22 sen | |
Table 1: JCY - 5161, Quarterly Dividend and Earning per Share.
Axiata – 6888: Uptrend continues, and new high.
Table 2: Axiata – 6888 (11/05/2010 ~ 01/09/2010)
Recently, the KLCI has been lifted by some heavy weighted index components, and one of them is Axiata. As shown on chart 2, price of Axiata remains above the 14, 21, 31 EMA, thus the uptrend remains intact.
In other words, for those who already bought this counter, it is a good idea to hold on to the position, until price should break below the 14, 21, 31 EMA, then it is a signal to take profit or the cut loss. As for those who are interested in taking up position, the idea entry point would be a formation of a higher-low; then, he or she must apply the 14, 21, 31 EMA as the trailing stop reference.
Nevertheless, as Axiata is breaking new high, next resistance for Axiata is at RM4.70 followed by RM5.00 level, while the 14, 21, 31 EMA is still serving as the dynamic support.
| 4 Q Rolling PER | 14.68 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0 % | 12.61% |
| 31/12/2008 | 0 sen | 0 % | 4.39 % |
Table 2: Axiata – 6888, yearly dividend, dividend yield, and net profit ratio.
KNM – 7164: New low.
Table 3: KNM – 7164 (11/05/2010 - 01/09/2010)
As shown on chart 3, KNM has been moving sideways above the RM0.48~RM0.50 level for about 3 months, and this has built up a considerable memory for traders ( either those who are holding or who are watching on the sidelines). As indicated by A, price breaks below the RM0.48~RM0.50 support, making a new low. This means that all these investors who had bought at around RM0.48~RM0.50 in the past 3 months are all turning their profit (if any) into losses, thus creating a big negative impact.
It is devastating to think that this massive fall of share price is a big discount, and when one should start buying while price started to fall, he is trading against the trend. This is because all these traders who had bought this share earlier are mostly wanted to break even, hence the selling pressure is strong.
Technically, provided that price is still staying below the 14, 21, 31 EMA, the technical outlook for KNM is on the negative side, and despite the falling of share price, there is no reliable support level for now.
| 4 Q Rolling PER | 31.43 times | Dividend Yield | 0 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0 % | 9.37% |
| 31/12/2008 | 1.5 sen | 3.7 % | 13.30% |
| 31/12/2007 | 4.0 sen | 0.52 % | 16.29% |
| 31/12/2006 | 5.0 sen | 0.57 % | 14.56% |
| 31/12/2005 | 5.0 sen | 1.40 % | 11.97% |
Table 3: KNM – 7164, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Technical analysis is not just only a statistic of price movement, it also reflects traders' memory as well as psychology. One does not only study himself when he decides to take up a new position, he has to study what the losers or the winners are taking, and what losers and winners wants. Therefore, this explains why we need to trade with a trend, and avoid trading against it.
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