Many times, market movers are usually moving in tandem in a sector. Other than properties and construction sector, oil and gas is another sector worth looking at. However, this does not mean that all oil and gas related counters are a good pick. In fact, some Oil and Gas counters are falling against the major trend. Therefore, when picking a counter from a sector, pick winner, don't pick loser.
KENCANA - 5122: Uptrend, testing RM2.25 resistance.
Chart 1: KENCANA - 5122 as at 15/12/2010.
As shown on chart 1, since re-entering into an uptrend in the 30th of August, price of Kencana has gained RM0.70 or 45% until now. While trending up, price of Kencana was firmly supported by the 14, 21, 31 EMA, which serves as the dynamic support.
Meanwhile, other than being supported by the 14, 21, 31 EMA, price of Kencana also formed higher-lows continuously, and this is an important uptrend characteristic.
Currently, price of Kencana is testing RM 2.25 resistance, and price went into a sideways consolidation. However, this does not affect the overall uptrend movement. Therefore, for those who are in position, it is a good idea to hold as long as the 14, 21, 31 EMA is still serving as the dynamic support.
Generally, as long as price is still rising, one could gradually raise the profit taking level according to the 14, 21, 31 EMA. Please note that in order for the trailing stop method to work, it could only be lifted higher, and cannot be lower. This way, it will help traders reducing trading risk while riding the maximum potential of the uptrend.
| 4 Q Rolling PER | 19.66 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/07/2010 | 0 sen | 0.00% | 12.46% |
| 31/07/2009 | 0.1 sen | 0.00% | 10.36% |
| 31/07/2008 | 0 sen | 0.00% | 5.86% |
| 31/07/2007 | 0 sen | 0.00% | 6.93% |
| 31/07/2006 | 0 sen | 0.00% | 0.00% |
Table 1: KENCANA - 5122, yearly dividend, dividend yield, and net profit ratio.
DIALOG – 7277: Uptrend still intact.
Chart 2: DIALOG – 7277 as at 15/12/2010.
As shown on chart 2, the price movement of Dialog is similar to Kencana, and both are trading in an uptrend, and the 14, 21, 31 EMA is serving as the dynamic support as well as the trailing stop reference. Currently, Dialog is being resisted by RM1.66 level. Although price is resisted by RM1.66 resistance, it did not retreat sharply, and only consolidating in a sideways manner.
Technically, a sideways consolidation is the best consolidation for when price is moving in sideways those who had just entered are not yet losing money, and therefore, it will not create much negative memory for these new comers. At the same time, when price is moving in sideways, it gives those who are waiting on the sideline, ready to enter, to gradually accept the price. Generally, as long as price is still staying above the 14, 21, 31 EMA, there is still a chance of the uptrend to extend its rally.
| 4 Q Rolling PER | 23.64 times | Dividend Yield ） | 1.93% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/06/2010 | 3.1 sen | 2.82% | 10.19% |
| 31/06/2009 | 3.6 sen | 3.30% | 8.35% |
| 31/06/2008 | 3.1 sen | 2.31% | 9.49% |
| 31/06/2007 | 2.2 sen | 1.17% | 10.26% |
| 31/06/2006 | 3.6 sen | 6.67% | 12.83% |
Table 2: DIALOG – 7277, yearly dividend, dividend yield, and net profit ratio.
TGOFFS – 7228: Technical rebound in downtrend.
Chart 3: TGOFFS – 7228 as at 15/12/2010.
As shown on chart 3, the price trend of Tgoffs is exactly the reverse of Kencana or Dialog. Although price of Tgoffs rebounded recently, it is only a technical rebound from a downtrend movement. This is not yet a reversal.
As indicated by A, price of Tgoffs rebounded after being supported by the RM1.33 support; however, it is resisted by the 14, 21, 31 EMA, which is serving as the dynamic resistance. Technically, provided that price is trending below the dynamic resistance, the technical outlook is expected on the negative side.
Meanwhile, we have to know that when stock price is falling in a downtrend, there are more losers than there are winners, and these losers are mostly regretted of buying too early, and some of them are getting ready to get out. Therefore, the selling pressure during a downtrend is higher. In other words, it is harder for price to move up or reverse in a downtrend. Many attempted to “out-guess” others by trying to be the “first” to ride the reversal, but many failed, and these traders are now responsible for creating those negative memories of the same downtrend.
If price should remains resisted by the 14, 21, 31 EMA, and later break below RM1.33, it means that every one in the downtrend, even those who managed to buy at the lowest RM1.33 will be losing money. Therefore, a new low is not a good thing. Next support is seen at RM1.24.
| 4 Q Rolling PER | 36.24 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0.00% | 0.75% |
| 31/12/2008 | 6 sen | 6.52% | 5.57% |
| 31/12/2007 | 0 sen | 0.00% | 5.47% |
| 31/12/2006 | 3 sen | 1.01% | 6.23% |
| 31/12/2005 | 3 sen | 1.52% | 7.83% |
Table 3: TGOFFS – 7228, yearly dividend, dividend yield, and net profit ratio.
Other Related Oil and Gas Companies:
| Companies | Technical Reading |
| [SAPCRES – 8575] | Remains above the 14, 21, 31 EMA and in an uptrend. |
| [RAMUNIA – 7206] | Testing RM0.45 resistance. |
| [PERISAI – 0047] | Remains in a trading range. |
| [SCOMI - 7158] | Short term technical rebound. |
| [ALAM - 5115] | Fell below the 14, 21, 31 EMA, and now technically rebounding, but testing the 14, 21, 31 EMA. |
| [WASEONG - 5142] | Technical rebound, but downtrend remains intact. |
| [DAYANG -5141] | Consolidating in an uptrend. |
Conclusion:
To conclude, one should buy with an uptrend, and never try to buy cheap. In fact, it will eventually cost you more when you attempt to buy cheap or being cheap.
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