KNM – 7164: Resisted at RM0.50
Chart 1: KNM – 7164 as at 29/09/2010。
As indicated by A, price of KNM has been consolidating above the RM0.48 ~RM0.50 support level for about 4 months, and as investors trying to accumulate stocks at this level around this time, thinking that this could be the bottom, they had unconsciously created a memory about this level.
However, as indicated by B, price of KNM fell sharply on the 1st of September, breaking below the RM0.48 support level. This means that all the investors who had bought above the RM0.48 level are now losing money, and the RM0.48~RM0.50 level is now their psychological level for breaking even, thus technically becoming the resistance.
As indicated by C, despite a strong rebound from RM0.39 level, price of KNM was precisely resisted at RM0.48, and this has proven the theory of the role change between a support and a resistance level, as it represent the memory of traders, who turned from a profit investor to a loser. In short, the RM0.48 resistance is expected to be strong, and the support is now at RM0.39.
| 4 Q Rolling PER | 32.50 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0sen | 0 % | 9.37 % |
| 31/12/2008 | 1.5 sen | 3.7 % | 13.30 % |
| 31/12/2007 | 4 sen | 0.52 % | 16.29 % |
| 31/12/2006 | 5 sen | 0.57 % | 14.56 % |
| 31/12/2005 | 5 sen | 1.4 % | 11.97 % |
Table 1: KNM – 7164 yearly dividend, dividend yield, and net profit ratio.
TGoffs – 7228: Forming a Symmetrical Triangle.
Chart 2: TGoffs – 7228 as at 29/09/2010。
As shown on chart 2, price of TGOFFS has been rising in an uptrend, while firmly supported by the 14, 21, 31 EMA. Since 27th of May, price of TGOFFS has gained RM1.00 in value or 100%, with its recent peak reaching RM2.02.
Although the uptrend is still intact, price of TGOFFS has formed a lower-high on the 15th of September, but it has not broken below a recent support, thus no new low. As a result, it has formed a Symmetrical Triangle, with L1 being the dynamic resistance, and L2 being the dynamic support. Notice that when forming a Symmetrical Triangle, price does not break new high nor new low, and the fluctuation of price is gradually lower.
Technically, this is a consolation stage, and the direction shall remain unclear until a valid break out away from the Symmetrical Triangle. If price should break above the L1 line, it would be a signal suggesting that the uptrend would resume, however, a strong volume is needed at the break out to confirm such signal. The bullish break out can be viewed as a new buy signal.
On the other hand, if price should break below the L2 line, it would be a bearish biased signal, suggesting that there is a risk of an end to the uptrend. Thus no buy signal.
| Leading PER | 35.46 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0 % | 0.75 % |
| 31/12/2008 | 6 sen | 6.52 % | 5.57 % |
| 31/12/2007 | 0 sen | 0 % | 5.47 % |
| 31/12/2006 | 3 sen | 1.01 % | 6.23 % |
| 31/12/2005 | 3 sen | 1.52 % | 7.83 % |
Table 2: TGoffs – 7228, yearly dividend, dividend yield, and net profit ratio.
Revision of last week's Case Study: Bjcorp – 3395: Might form an uptrend.
Chart 3: Bjcorp – 3395 as at 29/09/2010。
After breaking above the downtrend line, BJCORP continue to show positive biased signal. As indicated by A, although price of BJCORP retreated after resisted by RM1.15 resistance, it managed to rebound from the 14, 21, 31 EMA, forming a higher low, which is a sign of a possible uptrend formation. However, more volume is needed to confirm the signal.
Meanwhile, after forming a higher-low, price of Bjcorp should break the RM1.15 resistance, (new high) in order to fulfill the criteria of an uptrend. Or else, with the RM1.15 being intact, the chance of forming a trading range is still high.
Nevertheless, if traders would like to follow the higher-low signal as a buy signal, they should apply the 14, 21, 31 EMA as a trailing stop, to protect their position with limited losses. Because, technically, an ideal uptrend is firmly supported by the 14, 21, 31 EMA, and if price should break below the 14, 21, 31 EMA, it means that the uptrend has failed, thus a signal to cash out.
| 4 Q Rolling PER | 27.62 times | Dividend Yield | 0.93% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/04/2010 | 1 sen | 0.79 % | 1.23 % |
| 30/04/2009 | 3.35 sen | 3.99 % | -0.83 % |
| 30/04/2008 | 9 sen | 8.11 % | 17.20 % |
| 30/04/2007 | 0 sen | 0 % | 5.75 % |
| 30/04/2006 | 0 sen | 0 % | -24.33 % |
Table 3: Bjcorp – 3395, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
It is usually not a good idea to buy during a consolidation or during a formation of a triangle, especially for conservative type of investors. An ideal signal would be a valid bullish break out.
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