After breaking above the Triangle consolidation, the KLCI resumed its rally, making historical new highs. At the same time, total market volume also increased with volume above the 40-day Volume Moving Average. This suggests that the market is actively participated as new money inflow into the market also increases. As a result, many counters had resumed their rallies, and many making new highs as well.
DIALOG – 7277: Continues In uptrend.
Chart 1: DIALOG – 7277 as at 5/01/2011.
As the KLCI is breaking new high and the crude oil price is still on the rise, many oil and gas related counters are still trending up. As shown on chart 1, price of Dialog had a technical correction couple weeks ago, but after its correction, price rebounded above the 14, 21, 31 EMA, which is still serving as the dynamic support to the uptrend, and as a result, price of Dialog breaks above its latest resistance of RM1.89, making yet another multi-years new high.
Technically, as long as price of Dialog could stay above the 14, 21, 31 EMA dynamic support, the uptrend is still intact. Therefore, it is a good idea to hold, provided that one should gradually lift the cut-loss or profit taking level higher according to the 14, 21, 31 EMA. This way, the risk of trading will eventually be lower, while extending the gains on the uptrend.
As for those who are interested in taking up new position, the ideal entry level would be when price forms a higher-low. However, if price should stay rather far away from the dynamic support level, the risk of a pull back is still high. More importantly, once entered, one have to apply the 14, 21, 31 EMA as a trailing stop reference, and if price should break below the dynamic support, it is take to cut loss.
| 4 Q Rolling PER | 28.93 times | Dividend Yield | 1.57% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/06/2010 | 3.1 sen | 2.82% | 10.19% |
| 30/06/2009 | 3.6 sen | 3.30% | 8.35% |
| 30/06/2008 | 3.1 sen | 2.31% | 9.49% |
| 30/06/2007 | 2.2 sen | 1.17% | 10.26% |
| 30/06/2006 | 3.6 sen | 6.67% | 12.83% |
Table 1: DIALOG – 7277, yearly dividend, dividend yield, and net profit ratio.
Revision of last week's Case Study: BJCORP – 3395: Breaking away from consolidation, might form an uptrend.
Chart 2: BJCORP – 3395 as at 05/01/2011.
As indicated by A, price of Bjcop breaks above the RM 1.13~RM1.15 resistance, breaking away from its consolidation which lasted about 3 months. Meanwhile, as price breaks above the resistance, volume also increased significantly, and this suggests some inflow of fresh capital to off set the selling pressure.
Although price has broken away from its consolidation, it has not formed an uptrend yet. Technically, price has to form a Higher-low, preferably above the 14, 21, 31 EMA, then only it is a sign of an uptrend.
In other words, it is highly expected that price will have a pullback after breaking above the RM1.13 ~ RM 1.15 resistance. However, when price should retreat, it is important that it should not fall back below RM1.15, or the uptrend would not form. If price should retreat but rebound from the 14, 21, 31 EMA after the pullback, then there is a good chance that it would form a Higher-low, then it would be an ideal entry signal. Generally, it is a good idea to apply the 14, 21, 31 EMA as a trailing stop after taking up a position to minimize trading risk.
| 4 Q Rolling PER | 27.31 times | Dividend Yield | 0.81% |
| 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 | 9.00 sen | 8.11% | 17.20% |
| 30/04/2007 | 0 sen | 0.00% | 5.75% |
| 30/04/2006 | 0 sen | 0.00% | -24.33% |
Table 2: BJCORP – 3395, yearly dividend, dividend yield, and net profit ratio.
OSK- 5053: Likely to form a higher-low, uptrend continues.
Chart 3: OSK- 5053 as at 05/01/2011.
As shown on chart 3, after hitting its resistance of RM2.23, and entering into a consolidation since October, 2010, price of OSK has been supported by the 14, 21, 31 EMA dynamic support, and despite a consolidation, the uptrend remains intact. As indicated by A, now that price is showing some sign of a higher-low formation, the uptrend is likely to resume.
If price should rebound from the rising 14, 21, 31 EMA, it would form a higher-low. As for those who are already in position, it is a good idea to hold as long as price is still above the 14, 21, 31 EMA. As for new buyers, an ideal entry would be a new formation of higher-low, and once entered, a good practice is to apply the 14, 21, 31 EMA as a trailing stop to reduce unnecessary risk. Immediate resistance for OSK is seen at RM2.20 ~ RM 2.23.
| 4 Q Rolling PER | 14.24 times | Dividend Yield | 3.66% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 7.5 sen | 6.10% | 13.73% |
| 31/12/2008 | 7.5 sen | 7.58% | 16.59% |
| 31/12/2007 | 20 sen | 8.62% | 21.38% |
| 31/12/2006 | 12.5 sen | 6.38% | 23.84% |
| 31/12/2005 | 7.5 sen | 7.85% | 13.52% |
Table 3: OSK- 5053, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Not only that the KLCI breaks above is resistance, it also makes new high. Therefore, many counters are resuming their uptrend. One should simply following the direction of the broad market, with a sound trading plan, and the trading risk shall be manageable.
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