Chart 1: KLCI ast at 23/2/2011.
As indicated by A, the KLCI tested the T1 downtrend line, and also the 14, 21, 31 EMA dynamic resistance, and the KLCI retreated, and resumed its downtrend, within the downtrend channel of the T1 and T1 lines. Technically, provided that the KLCI is still trending below the 14, 21, 31 EMA, the technical outlook is still negative.
Although the KLCI is still trending down in the downtrend channel, it has not broken 1500 psychological support level. We would like to remind our readers that the characteristic of a downtrend formation is lower-High, and later new low. This is because, when price breaks new low, it means more investors (including those whom are already in profit) will be losing money, or turning their profit into losses. As a result, it will trigger more selling pressure, and create more negative memory in the downtrend.
As mentioned last week, if the KLCI could find its support above 1500, then the KLCI or the market would have a chance to temporary prevent the downtrend for getting worse, by forming a sideways consolidation. And if so, after a while, the new inflow of fresh capital will eventually neutralize some selling pressure, and then, the KLCI or the market would have a better position to start a new trend. In other words, if the KLCI could stay above 1480~1500, the bear is still away from sight.
KLK – 2445: Testing important support.
Chart 2: KLK – 2445 as at 23/02/2011
As shown on chart 2, price of KLK has tested the RM22.98 (Rounding up to RM23) a few times, but still it failed to break above this resistance, and price of KLK started to decline after that. As indicated by A, price of KLK is now testing the RM20~RM21 support level, and this is a support for KLK since December, 2010.
If price of KLK should remain supported by RM20~RM21, it is likely that the sideways consolidation could extend, and as for those investors whom had bought earlier and at a lower price, they could choose to hold their position in profit. However, if price should break below the RM20 support, it means that all investors whom had bought in December, 2010, will eventually loss money, and this will trigger more selling as some of these investors might want to cut loss, or some are breaking even. In short, if the support is violated, more downside movement is likely for KLK.
| 4 Q Rolling PER | 20.89 times | Dividend Yield | 2.85% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/09/2010 | 60 sen | 3.00% | 13.51% |
| 30/09/2009 | 40 sen | 2.90% | 9.20% |
| 30/09/2008 | 70 sen | 7.29% | 13.25% |
| 30/09/2007 | 50 sen | 3.79% | 13.70% |
| 30/09/2006 | 50 sen | 4.59% | 11.06% |
Table 1: KLK – 2445, yearly dividend, dividend yield, and net profit ratio.
Genting – 3182: Short term Downtrend.
Chart 3: Genting – 3182 as at 23/02/2011.
After touching its peak of RM11.98 on the 13th of January, price of Genting has been falling since then, forming a short term downtrend, and the 14, 21, 31 EMA is still serving as a dynamic resistance. Last week, price of Genting managed to rebound from the RM10 support level, but unfortunately, after the rebound, price of Genting remained resisted by the 14, 21, 31 EMA, and therefore, forming another lower-high, and the short term downtrend remains intact.
As indicated by A, if price of Genting should break below the RM10 support, it would be forming a new-low of 4 months, which fulfilled the characteristic of a downtrend (lower-high and new low). Technical outlook for Genting remains negative for now. And as long as price of Genting is still staying below the 14, 21, 31 EMA, it is a good idea to stay away from this stock.
| 4 Q Rolling PER | 17.42 times | Dividend Yield | 0.75% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2010 | 7.8 sen | 0.75% | 14.50% |
| 31/12/2009 | 7.2 sen | 1.14% | 11.74% |
| 31/12/2008 | 7 sen | 1.89% | 6.27% |
| 31/12/2007 | 37 sen | 0.98% | 12.15% |
| 31/12/2006· | 32 sen | 0.97% | 21.66% |
Table 2: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.
Axiata – 6888: Technical correction in long term uptrend.
Chart 4: [Axiata – 6888] as at 23/02/2011.
Like most of the blue chips counters, price of Axiata was affected by the sharp correction across the market. However, despite being affected by the correction, the long term uptrend of Axiata is still intact. This is because Axiata weekly chart is still staying above the 14, 21, 31 Weekly EMA long term dynamic support.
In other words, for those investors whom had bought this stock at a lower price, it is a good idea to continue to hold, provided that he or she should lift the trailing stop or profit taking level gradually according to the 14, 21, 31 Weekly EMA. Still, if any one should feel uncomfortable amid the market condition, he or she could choose to take profit partially, by selling 1/3 of the positions.
| 4 Q Rolling PER | 23.57 times | Dividend Yield | 2.02% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2010 | 10 sen | 2.02% | 11.33% |
| 31/12/2009 | 0 sen | 0.00% | 12.61% |
| 31/12/2008 | 0 sen | 0.00% | 4.39% |
Table 3: Axiata – 6888, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
It is irrational to repeat the same actions with the same mindset, but every time expect a different result. A third person can see clearly that this is a dead-end in a maze, but the we, mouse inside the maze, have no idea. Since when, and who, instill the idea of "buy on dip" or "buy low sell high" into our mindset? And had we ever spent a considerable amount of time and dedication to explore the validity of such idea? We normal people are generally feeling more comfortable by sticking to old ideas, such as buying low, but ask ourselves honestly, didn't every we buy because we somehow believed that it was the lowest price at that moment? And we know the true result to that. It is easy to conceive the needs to change our trading mindset, to follow the direction of the market, not against it. Taking the action to change, on the other hand, takes real courage and honesty to one self.
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