TGoffs – 7228: In Downtrend.
Chart 1: TGoffs – 7228 as at 03/11/2010.
As shown on chart 1, price of Tgoffs remains in its downtrend, and now testing the support of RM1.55~RM1.57. As indicated by a, b and c, those are lower-Highs of price movement, which is the typical characteristics of a downtrend. With lower-Highs, the 14, 21, 31 EMA serves as a dynamic resistance, and as long as price is below the dynamic resistance, technical outlook shall remains negative, with stronger selling pressure.
Why is there a stronger selling pressure in a downtrend? Try think this, when price is falling below the 14, 21, 31 EMA, are there more people making money or more people losing money? From a, b, and c, the answer is clear. When price falls, those who have bought earlier would lose money, and when the loss gets deeper, the feeling of regret is stronger, much stronger than the investors' original intention when the time they bought their share. Therefore, gradually, the desire to break even is unconsciously growing.
Technically, if price should rebound from RM 1.55~RM1.57, it would reduce the negative impact of this downtrend, and if price should consolidate, it would help neutralize some selling pressure, for new buyers are slowly replacing old losers, and these new buyers are not yet losing money.
However, if price should break below RM1.55~RM1.57 after its consolidation, it would be a negative signal, as all new buyers or old losers are losing more money. This is the impact of a new low. In short, provided that price is falling below the 14, 21, 31 EMA, there is no ideal buy signal, no matter how cheap the stock price may seem like.
| Leading PER | 31.27 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | ||
| 31/12/2009 | 0 sen | 0.00% | |
| 31/12/2008 | 6 sen | 6.52% | |
| 31/12/2007 | 0 sen | 0.00% | |
| 31/12/2006 | 3sen | 1.01% | |
| 31/12/2005· | 3 sen | 1.52% | |
Table 1: TGoffs – 7228, yearly dividend, dividend yield, and net profit ratio.
Kencana – 5122: Remains in an uptrend.
Chart 2: Kencana – 5122 as at 03/11/2010.
As shown on chart 2, price of Kencana remains in its uptrend, and totally opposite of what's going with Tgoffs. Based on its chart reading, the 14, 21, 31 EMA is still serving as the dynamic support, thus the uptrend is still healthy, but consolidating. Notice the characteristics of this uptrend, is higher-Lows and breaking new high.
If price should rebound from the 14, 21, 31 EMA and form a higher-Low again, the uptrend is set to continue.Technically, as long as price is still above the 14, 21, 31 EMA, it is a good idea to hold, but traders or investors must utilize the 14, 21, 31 EMA as a trailing stop reference. Once price breaks below the 14, 21, 31 EMA, it is a signal to cut loss, or the take profit.
Generally, most people think that after price has rallied, price would fall, and they would stay away from a rising stock, but turn to a stock which is falling, for they believe that after falling, price should rebound. This is logically true, but the problem is no body will know when.
Therefore, a more practical approach should be trend following. First, identify the trend and its characteristics, then follow the trend by buying at a higher-Low not far away from a trailing stop level, and follow the trading plan.
| 4 Q Rolling PER | 17.77 times | Dividend Yield | 0.00% |
| Dividend | Dividend Yield | ||
| 31/07/2010 | 0 sen | 0.00% | |
| 31/07/2009 | 0 sen | 0.00% | |
| 31/07/2008 | 0 sen | 0.00% | |
| 31/07/2007 | 0 sen | 0.00% | |
| 31/07/2006 | 0 sen | 0.00% | |
Table 2: Kencana – 5122, yearly dividend, dividend yield, and net profit ratio.
Petra – 7108: In risk of a new low.
Chart 3: Petra – 7108 as at 03/11/2010.
As shown on chart 3, since falling below the 14, 21, 31 EAM on the 18th of August, price of Petra has been trending down, while the 14, 21, 31 EMA continue serving as its dynamic resistance since. Fortunately, it managed to consolidate at RM0.75~RM0.76 level, and remained consolidating for about a month now.
During its consolidation, price of Petra tested the 14, 21, 31 EMA two times, but failed. Therefore, technically, the technical outlook for Petra remains negative, despite a huge 'discount' after falling.
If price should later break below the RM0.75 level, then all investors whom had been holding, including those who bought recently at a much lower price, would be losing money. Thus creating a negative memory at this level. There is no ideal buy signal for now, unless price could break above the 14, 21, 31 EMA with strong volume, then forms a higher-low.
| 4 Q Rolling PER | 0 times | Dividend Yield | 2.67% |
| Dividend | Dividend Yield | ||
| 31/12/2009 | 2 sen | 1.48% | |
| 31/12/2008 | 2 sen | 1.60% | |
| 31/12/2007 | 2 sen | 0.37% | |
| 31/12/2006 | 2 sen | 0.72% | |
| 31/12/2005 | 1.8 sen | 0.81% | |
Table 3: Petra – 7108, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Technical analysis is basically a statistic of price, thus the movement of price reflecting the investors or trader's memory and psychology. To understand the behavior and psychology of the market, is very difficult, and it takes years, or maybe never to master. This is something that a computer could not supply, nor any short-cut courses about stock picks.
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