MAS – 3786: Continue in weakness.
Chart 1: MAS – 3786 as at 24/11/2010.
As indicated by A, since falling below the T1 uptrend line on the 29th of October, price of MAS had also broken below the 14, 21, 31 EMA, and until now, it is still staying below the 14, 21, 31 EMA. Therefore, the 14, 21, 31 EMA is serving as a dynamic resistance.
Technically, if price should remain resisted by the dynamic resistance, and forming lower-highs, it means that the downtrend is still intact, and it is not a good idea to pick up any of this share, despite the share price is getting 'cheaper'.
Nevertheless, support for MAS is at RM2.00. For trend trading, the ideal buy signal would be when price break above the 14, 21, 31 EMA, and later form a higher-low, with strong volume. If one should buy with this signal, he or she shall apply the 14, 21, 31 EMA as a trailing stops reference.
| 4 Q Rolling PER | 15.53 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0.00% | 4.24% |
| 31/12/2008 | 2.25 sen | 0.74% | 1.58% |
| 31/12/2007 | 2.50 sen | 0.51% | 5.57% |
| 31/12/2006 | 0 sen | 0.00% | -1.01% |
| 31/12/2005 | 0 sen | 0.00% | -14.29% |
Table 1: MAS – 3786, yearly dividend, dividend yield, and net profit ratio.
Continuation of previous case study: Bursa – 1818: Short term weakening.
Chart 2: Bursa – 1818 as at 24/11/2010.
Previously, we said if price of Bursa could return to above the 14, 21, 31 EMA, then it would break away from its downtrend formation. However, as indicated by A, price of Bursa failed to break above the 14, 21, 31 EMA, but instead, falling further; and the 14, 21, 31 EMA is still serving as a dynamic resistance. This shows that the technical outlook for Bursa is still weak.
In other words, it is a dangerous move if one should attempt to 'buy on dip' when price is falling. Because, one would be buying into a downtrend. A sound approach is to buy when price forms a higher-low after returning to above the 14, 21, 31 EMA. Nevertheless, support for Bursa is at RM7.99 or RM8.00, followed by RM7.79 or RM7.80 WinChart Automatic Fibonacci Retracement.
| 4 Q Rolling PER | 24.04 times | Dividend Yield | 2.34% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 19.10 sen | 2.46% | 44.13% |
| 31/12/2008 | 24.30 sen | 4.72% | 31.48% |
| 31/12/2007 | 85.00 sen | 5.94% | 48.91% |
| 31/12/2006 | 54.50 sen | 6.77% | 41.55% |
| 31/12/2005 | 20.00 sen | 5.46% | 42.13% |
Table 2: Bursa – 1818, yearly dividend, dividend yield, and net profit ratio.
GENP – 2291: Still in uptrend.
Chart 3: GENP – 2291 as at 24/11/2010.
As shown on chart 3, price of GENP retreated last two weeks as a technical correction, after hitting RM9.00 resistance. During its technical correction, it tested the 14, 21, 31 EMA dynamic support, and it managed to rebound from the 14, 21, 31 EMA, and this suggests that price of GENP is still in an uptrend.
However, although price rebounded from the 14, 21, 31EMA, it failed to break above RM9.00; instead, it formed a lower peak of RM8.80. If price should retreat again, it would be forming a lower-high.
Still, despite a chance of a lower-high formation, provided that price could remain above the 14, 21, 31 EMA, it is likely that price of GENP to consolidate further, and possible forming a Triangle. Nevertheless, immediate resistance is at RM9.00 while the support is RM 8.30.
| 4 Q Rolling PER | 22.83 times | Dividend Yield | 1.02% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 9 sen | 1.46% | 31.19% |
| 31/12/2008 | 10 sen | 2.82% | 36.03% |
| 31/12/2007 | 14 sen | 1.62% | 37.96% |
| 31/12/2006 | 7 sen | 1.64% | 29.68% |
| 31/12/2005 | 6.25 sen | 2.91% | 32.87% |
Table 3: GENP – 2291, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
As the KLCI is taking a correction, the market direction is temporary unclear, and as a result, many stocks had started to turn weak. However, this does not mean that investors should start bargain hunting. In fact, one should follow the direction of the stock price, and if price should form a downtrend, the best thing to do its to avoid it at all.
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