KLCI, Genting, MRCB, Airasia

After the earthquake and Tsunami, the nuclear crisis in Japan is the main concern of investors around the world, with last week's Nikkei 225 index was falling up to 2000 points or 20%, and the regional markets were severely affected too. However, the Malaysian market was mildly affected.

Chart 1: KLCI as at 16/3/2011.

As shown on chart 1, although the KLCI was also affected by the negative impact of the Japan nuclear crisis, the downside movement of the KLCI was rather insignificant. As indicated by A, the KLCI had once broken below the 1474 support, but it managed to return to above the support level and this shows that the support for the KLCI remains at 1474~1480. If the KLCI could hold up above this level, the KLCI could prolong its sideways consolidation.

But still, with the KLCI below the 14, 21, 31 EMA the technical outlook for the KLCI remains on the lower side. If the KLCI should break below the 1474 again, it would be making a half year new low.

Understanding volume – continue.

Last week, we discussed the relationship of volume with price movement. This week, we shall look deeper into their relationship and the effect caused.

A: Price gain with volume up.

When price goes up associated with the rising of volume, we theoretically say that there are increased of new buyers (greed) to replace the old sellers (fear). Not only that, these new buyers are mostly paying a higher price to get in, and old sellers are asking for more premium to get out. This is a good sign, especially for break out of resistance. Study Chart 1A.

Chart 1A: Price up with volume.

B: Price up but volume unchanged:

When price continues to go up, but volume remains unchanged, or there are no significant increased of volume, it is rather normal. This shows that there is still positive volume flow as new buyers are basically still paying higher price to take their shares from old sellers. Provided volume stays almost the same, it is fine. Another factor we must consider is that when price is getting higher, the buying power of the same money is less. Therefore, it is getter harder and harder to get the equal amount of shares for the same money. However, when it comes to a break out of an important resistance, significant increased of volume is still in favor.

Next week, we shall continue in exploring other combination of price and volume. Below are this week's case studies.

Genting – 3182: Short term weakness, testing RM10 support.

Chart 2: Genting – 3182 as at 16/03/2011.

As shown on chart 2, since breaking below the 14, 21, 31 EMA on the 7th of February, price of Genting has been staying in a short term weakness trend, whereas the 14, 21, 31 EMA is serving as the dynamic resistance. However, indicated by A, price of Genting remains supported by the RM10.00 psychological support level. Generally, investors are more likely to remember round number, and therefore, it is called psychological support.

If price should break below RM10.000, it would be making a 6 months plus new low. In other words, all investors whom had bought Genting in the last 6 months, no matter at a lower price or higher price, will be losing money, or turning their profit into losses. Therefore, it would evoke more selling pressure.

In short, when price breaks below the support, selling pressure will increase and therefore, not a good idea to pick up at that time, or it could be viewed as a signal to cut loss. In other words, as long as the price is still staying below the 14, 21, 31 EMA, it is a good idea to stay away from it.

4 Q Rolling PER	16.82 times	Dividend Yield	0.78%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2010	7.80 sen	0.75%	14.50%
31/12/2009	7.20 sen	1.14%	11.74%
31/12/2008	7.00 sen	1.89%	6.27%
31/12/2007	37 sen	0.98%	12.15%
31/12/2006	32 sen	0.97%	21.66%

Table 1: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.

MRCB - 1651: Short term weakness.

Chart 3: MRCB - 1651 as at 16/03/2011.

As shown on chart 3, price of MRCB formed a Descending Triangle, with the L1 line being the dynamic resistance. Support is at RM 1.97~RM 2.00. A descending Triangle, is a consolidation pattern of price with weakness, for the L1 descending line is actually outlining the formation of lower-high, which is the early sign of a possible downtrend formation; while the support remains unchanged.

If price should break below the RM1.97~RM2.00 support, it would be making a 6 months new low. By then, it means more people will be losing money, and eventually creating more selling pressure. Technically, as long as price of MRCB is staying below the L1 line or the 14, 21, 31 EMA, the technical outlook for MRCB is expected to be weak, and it is not a good idea to buy right now. Next support is seen at RM1.77~RM 1.80.

If price should prolong it's sideways consolidation, price will eventually break away the L1 line, but it does not mean that price will form an uptrend reversal. Not until it forms a higher-low. Even so, investors should consider the overall market condition, volume et cetera.

4 Q Rolling PER	39.88 times	Dividend Yield	0.72%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2010	1.5 sen	0.66%	6.30%
31/12/2009	1 sen	0.73%	3.76%
31/12/2008	0 sen	0.00%	-7.18%
31/12/2007	0 sen	0.00%	4.51%
31/12/2006	0 sen	0.00%	6.20%

Table 2: MRCB - 1651, yearly dividend, dividend yield, and net profit ratio.

Airasia – 5099: Short term weakness.

Chart 4: Airasia – 5099 as at 16/03/2011.

As shown by chart 4, the price movement of Airasia is rather similar to the price movement of MRCB, and they both are staying below the L1 descending line as well as the 14, 21, 31 EMA. The short term view of Airasia is weak, but it is still above the RM2.40 support, thus the current condition is not devastating.

As indicated by A, price of Airasia tested the 14, 21, 31 EMA and the L1 line after rebounding from the RM 2.40 support. If price should break away from the L1 line, it would help the technical outlook of Airasia, back to neutral from the short term bearish biased movement. However, it does not mean a bullish reversal right away, not until price forms a higher-low.

On the other hand, if price should break below RM2.40, it would be making a near 6 months new low, thus creating more selling pressure, as all the investors whom had bought within this 6 month will be making losses, and turning their profit into losses. Therefore, it will be a sell signal.

4 Q Rolling PER	6.58 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2010	0 sen	0.00%	26.72%
31/12/2009	0 sen	0.00%	17.27%
31/12/2008	0 sen	0.00%	-17.87%
31/12/2007	0 sen	0.00%	38.90%
31/12/2006	0 sen	0.00%	31.07%

Table 3: Airasia – 5099, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

Most of the time, when stock price forms a downtrend, it will first form a lower-high, followed by breaking a new low. However, the behavior of stock price varies with different stocks, and to identify these behavior, is actually not easy. That's why, it takes years to master this skill, and most failed.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

KLCI, KLK, Genting, AXIATA

Due to worries in Libya as well as China raising interest rate, the Asian markets were affected, and many counters of local market are also affected. Especially, on the 22nd of February, there were 880 counters losing. (There were 905 counters losing on the 10 of March, 2008). Investors could do a simple math and figure the probabilities of picking a winner when losers outnumbered winner in such scale.

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.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

KLCI, Genting, KUB, KLK

The KLCI rebounded precisely at 1500 psychological support before the Chinese New Year holiday. However, it failed to return to its previous peak of 1577, but instead, if formed a lower-high at around 1540, and this is shown as the T1 downtrend line. As indicated by A of Chart 1, if the KLCI should start falling after being resisted by the T1 line, the KLCI would have a risk of forming a short term downtrend and the technical outlook for the KLCI would be on the negative side.

Chart 1: KLCI reversal characteristic.

Although the KLCI is showing some weakness with the possible lower-high formation, it is still too soon to call for a bear run for the KLCI remains above 1500. If the KLCI should stay above 1500, it would not be forming a downtrend. This is because when the KLCI or the market should fall but stay above 1500, it would only affect those investors who had entered their positions in the past 1 month, and if the KLCI should prolong its consolidation above 1500, the selling pressure or the negative memory of these losers will be neutralized by new inflow of fresh capital, big of small. Don't forget, those who had bought earlier or at a lower level, are basically unaffected yet, thus the selling pressure is not likely to be too strong.

However, the above explanation is only based on a theory. In reality, one should always be prepared for the worst. If the KLCI should continue to retreat and break below 1480~1500, it means that not only investors who bought in the last month are affected, those who had entered for the last 4 months, and even those whom are already in profit will be affected too, and if these investors start selling, one could only expect more selling pressure, and the KLCI or the market could go down further. This is why, when analyzing the market, one should not only analysis his own position, he has to understand others positions and memory of the losers as well, to better understand the market behavior.

Genting – 3182: Short term downtrend.

Chart 2: Genting – 3182 as at 09/02/2011.

As indicated by A on Chart 2, price of Genting ended lower as investors are taking profit, and the sellers are still dominant. Price of Genting broke below the 14, 21, 31 EMA dynamic support, and the technical outlook is now on the negative side. Trying to catch a rebound would be very riskly.

Technically, if price of Genting should stay below the 14, 21, 31 EMA, the technical outlook shall remain weak. If this short term downtrend shall persist, more investors will be affected, and the selling pressure will increase. Current support of Genting is at RM9.50 ~ RM 10.00. If price should break below this support, more downside movement is expected.

As for those whom are already in position much earlier at a lower price, it is crucial to monitor the long term weekly chart. As shown on Chart 2A, price of Genting is now testing the 14, 21, 31 Weekly EMA, and if price should break below this long term dynamic support, the long term uptrend would be affected, and investors are advised to take profit or to cut loss.

Chart 2A: Genting – 3182, weekly chart.

4 Q Rolling PER	20.02 times	Dividend Yield	0.67%
Dividend		Dividend Yield	Net Profit Ratio
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%	21.65%
31/12/2005	29 sen	1.36%	22.86%

Table 1: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.

KUB – 6874: Rebounding from the uptrend dynamic support.

Chart 3: KUB – 687 as at 9/02/2011.

During the recent correction of the KLCI, counters affected most are heavy weighted blue chips. As for non-blue chip counters, they are less affected, and some even remain in their uptrend. As shown on chart 3, price of KUB had a technical correction last two weeks, but price remains above the 14, 21, 31 EMA dynamic support, and this suggests that the uptrend is still intact.

As indicated by A, price of KUB rebounded from the 14, 21, 31 EMA, and price could re-test its peak of RM0.95. Technically, if price should stay above the 14, 21, 31 EMA, it is a good idea to hold, as long as investors could lift the cut loss level according to the 14, 21, 31 EMA, and this way, they could gradually reduce the trading risk. As for investors who are not feeling comfortable, an alternative options is to selling 1/3 of the position, while apply a trailing stop method for the remaining.

4 Q Rolling PER	13.27 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0.00%	5.62%
31/12/2008	0 sen	0.00%	3.92%
31/12/2007	0 sen	0.00%	-14.43%
31/12/2006	0 sen	0.00%	-1.08%
31/12/2005·	0 sen	0.00%	-4.77%

Table 2: KUB – 6874, yearly dividend, dividend yield, and net profit ratio.

KLK - 2445: Long term uptrend, but temporary capped by a resistance.

Chart 4:KLK - 2445 as at 19/01/2011.

As shown on chart 4, price of KLK has been testing the RM 23 resistance a few times in 1 and a half month, but it is still being resisted by the RM23 level. Therefore, the uptrend is temporary capped, and the upside room is now limited. As indicated by A, price of KLK started to retreat after hitting its resistance at RM22.90, but it has not formed a downtrend, because it has not shown any signs of a lower-high formation.

If price of KLK should continue to retreat, then we shall watch out for the support at RM 20. If price should rebound from RM20 support, it would most likely be forming a trading range, and KLK could prolong its consolidation, without forming a downtrend.

As for investors whom had already entered their positions earlier at a lower level, it is important to monitor the long term weekly chart of KLK. As shown on chart 4A, the long term 14, 21, 31 weekly EMA is still serving as a healthy uptrend dynamic support for KLK, despite the recent consolidation. This suggests that the long term movement of KLK is still healthy, and therefore, long term investors could choose to hold.

Chart 4A: KLK - 2445 weekly chart.

4 Q Rolling PER	23.73 times	Dividend Yield	2.66%
Dividend		Dividend Yield	Net Profit Ratio
30/09/2010	60 sen	3.00%	13.51%
30/09/2009	40 sen	2.90%	9.2%
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 3: KLK - 2445, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

The KLCI must stay above 1480~1500, or else, more the market sentiment would be further dampen by more selling pressure. As for individual investors, a prudent trading plan is always needed when following a trend. As for now, trying to catch a rebound would be a risky move.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

TWSCorp , Genting, Maybank

Chart analysis is most important part of technical analysis, while technical indicators are a by products of price movement. In other words, price must first move, in order to move indicators signals. Therefore, many professionals are analyzing patterns over technical indicators. Among many chart patterns, Triangles are most common.

TWSCorp – 4804: Forms a Descending Triangle.

Chart 1: TWSCorp – 4804 as at 03/11/2010.

As shown on chart 1, price of TWSCorp started to retreat after hitting a resistance at RM1.00 on the 22nd of September, and since then, price of TWSCorp has been consolidating, while still supprted by the 14, 21, 31 EMA dynamic support.

At the same time during its consolidation, it forms a Descending Triangle, with RM0.87 as its support line, and the descending line as its dynamic resistance. When price is consolidating inside a Descending Triangle, its price fluctuations reduced gradually, and the direction would be uncleared, until a valid break out away from the triangle. In the case of a Descending Triangle, the consolidation shows some weakness, as the descending line already marked a formation of lower-high, which is a sign of weakness.

Nevertheless, since price is now at the tip of the Triangle, the break out signal is near the corner. If price should break below RM0.87 support, it means all investors who had bought this share above RM0.87 in this month will be turning their profit (if any) into losses, thus creating negative impact to the investors' memory. Also, if price should break below RM0.87, the 14, 21, 31 EMA would reverse its role to serve as the dynamic resistance, thus the technical outlook for TWSCorp would turn negative.

In the contrary, if price should break above the Descending Triangle, with strong volume, then form a higher-low above the 14, 21, 31 EMA, it would resumes its uptrend which started in July.

Leading PER	17.25 times	Dividend Yield	0.00%
Dividend		Dividend Yield
31/12/2009	0 sen	0.00%
31/12/2008	0 sen	0.00%
31/12/2007	0 sen	0.00%
31/12/2006	0 sen	0.00%
31/12/2005	0 sen	0.00%

Table 1: TWSCorp – 4804, yearly dividend, dividend yield, and net profit ratio.

Follow up on last week's case study: Genting – 3182: Resisted at RM10.50.

Chart 2: Genting – 3182 as at 03/11/2010.

As shown on chart 2, price of Genting formed an Ascending Triangle, while consolidating, until now, it failed to break above RM10.50 resistance, but still, supported by the 14, 21, 31 EMA dynamic support. Since it is still forming higher-lows, the uptrend remains intact, but with limited upside room, until a break out above the RM10.50.

Meanwhile, volume traded on the 2nd of November increased significantly, suggested that there were lots of shares being changed hand. Fortunately, the changing hands of shares does not result in sharp fall of price, or else, it would had created a massive selling pressure.

If later, price of Genting should break above the RM10.50 resistance, then it would break away from its consolidation, and resume its uptrend. Ideally, the break out should be accompanied by strong volume, or else, there is a chance of a false break out.

In short, as long as price is still above the 14, 21, 31 EMA, it is a good idea to hold, as the uptrend is still intact. Provided a trailing stop trading plan is in place, the trading risk of a prudent investor should remain low.

4 Q Rolling PER	24.38 times	Dividend Yield`	0.69%
Dividend		Dividend Yield
31/12/2009	7.2 sen	1.14%
31/12/2008	7sen	1.89%
31/12/2007	37 sen	0.98%
31/12/2006	32 sen	0.97%
31/12/2005	29 sen	1.36%

Table 2: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.

Maybank – 1155: Forms an Ascending Triangle.

Chart 3: Maybank – 1155 as at 03/11/2010.

As shown on chart 3, price of Maybank formed a similar Ascending Triangle, just like Genting. Price of Maybank tested the RM9.00~RM9.04 resistance a few times, but failed. However, the overall uptrend remains intact, as the price is still supported by the 14, 21, 31 EMA dynamic support with formation of higher-lows.

Technically, price of Maybank has to break above RM9.00~RM9.04 in order to resume its uptrend, or else, if price should prolong its consolidation, and later break below the 14, 21, 31 EMA, it would mark an end to the uptrend.

However, there is no need to take profit aggressively. This is because, even if price should break below the 14, 21, 31 EMA and the uptrend is over, it does not necessary mean that it would reverse and form a downtrend immediately. To form a downtrend, it usually will form a lower-high, which is a sign of weakness. There is also a chance of a trading range formation, just like what happened to Axiata for about a month recently, if the uptrend should temporary come to an end.

4 Q Rolling PER	16.67 times	Dividend Yield	6.12%
Dividend		Dividend Yield
30/06/2010	55 sen	6.77%
30/06/2009	8 sen	1.36%
30/06/2008	52.5 sen	7.45%
30/06/2007	80 sen	6.67%
30/06/2006	85 sen	7.94%

Table 3: Maybank – 1155, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

A prudent investor is never rush, and he waits for signals, signals from a chart pattern. Therefore, the ability to identify patterns is more important and reading indicators signals.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Bjcorp, Gamuda, Genting

Despite the KLCI is climbing higher, total market volume did not make new high but only managed to stay at the 40-day VMA level. This suggests that investors are still being very cautious, while selectively taking up position, thus the market is not entirely bullish. Other than that, this also implies that the market confidence is still at a border level, with only blue chips leading the KLCI, while many others individual stocks are still weak. Nevertheless, the overall market sentiment is still on the postive side.

Bjcorp – 3395: Break away from its downtrend.

Chart 1: Bjcorp – 3395 (24/05/2010 ~ 15/09/2010 )

As shown on chart 1, price of Bjcorp broke above the T1 downtrend line, which lasted for 5 months, breaking away from its downtrend. As indicated by A, price of Bjcorp might be forming a higher-low but without sufficient volume, suggesting that the buying interests is still low.

Nevertheless, since price of Bjcorp has been falling for the past 5 months, and its share price has loosed up to 50%, and any reversal would be resisted by many selling pressure. This is because many of the investors who had bought Bjcorp during the past 5 months are mostly losing money, thus most of them are getting ready to break even, and as a result, there are a huge numbers of ready sellers. This is why a reversal will generally takes longer to form.

Technically, if investors should follow the break out signal and buy, he or she must apply the 14, 21, 31 EMA as the trailing stops reference. This is because there is a bigger chance for Bjcorp to move into a trading range then to form an uptrend immediately. Support for Bjcorp is at RM0.925 whiel the resistance is at RM1.15 level.

4 Q Rolling PER	51.11 times	Dividend Yield	0.95%
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 1:Bjcorp – 3395, yearly dividend, dividend yield, and net profit ratio.

Gamuda – 5398: New high, and uptrend continue.

Chart 2: Gamuda – 5398 (24/05/2010 ~ 15/09/2010 )

As indicated by A, price of Gamuda broke above the RM3.50 resistance on the 1st of September, 2010, and later price pulled back due to profit taking, but it managed to stay above the 14, 21, 31 EMA, and formed a higher-low, suggesting that the uptrend is still intact. The higher-low was an ideal entry level.

Technically, investors who had followed the higher-low as an entry point should also apply the 14, 21, 31 EMA as the dynamic support, as well as the trailing stops reference. If price should stay above the 14, 21, 31 EMA, it would be a good idea to keep the stock as the uptrend is still intact. If price should break below the 14, 21, 31 EMA, it would be a signal to take profit. Nevertheless, next resistance for Gamuda is at RM4.00 while the support, remains at 14, 21, 31 EMA.

4 Q Rolling PER	30.13 times	Dividend Yield	2.16%
Dividend		Dividend Yield	Net Profit Ratio
31/07/2010	8 sen	2.38 %	7.10%
31/07/2009	25 sen	9.26 %	13.52 %
31/07/2008	46 sen	5.90 %	12.23 %
31/07/2009	16 sen	4.57 %	13.74 %
31/07/2006	16 sen	3.43 %	17.26 %

Table 2: Gamuda – 5398, yearly dividend, dividend yield, and net profit ratio.

Revision of last week's case study: Genting – 3182: New high.

Chart 3: Genting – 3182 (24/05/2010 ~ 15/09/2010 )

As shown on the chart above, price of Genting rebounded strongly from the 14, 21, 31 EMA, breaking above the RM9.62 resistance, making a new high since the share split in 2007. Price of Genting later hit RM10.02 level, and profit taking activities pulled back its price slightly. Therefore, the immediate resistance for Genting is at RM10.00 level while the support is still at 14, 21, 31 EMA.

Technically, provided that price of Genting is still above the 14, 21, 31 EMA, it means that the uptrend is still intact, thus a good idea to hold, until price should break below the 14, 21, 31 EMA, then it would be a signal to take profit.

Please note that the characteristic of Genting uptrend is higher-low formation above the 14, 21, 31 EMA and breaking above the latest resistance. It is crucial to identify the uptrend characteristic before one should pick up any shares. After buying, he or she should apply the 14, 21, 31 EMA as a trailing stops reference, and so long as the price is still above the 14, 21, 31 EMA, investors should hold until the uptrend is over, in which the price would break below the 14, 21, 31 EMA.

4 Q Rolling PER	23.24 times	Dividend Yield	0.72%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	7.20 sen	1.14 %	11.74 %
31/12/2008	7.00 sen	1.89 %	6.27 %
31/12/2007	37 sen	0.98 %	12.15 %
31/12/2006	32 sen	0.97 %	21.56 %
31/12/2005	29 sen	1.36 %	22.86 %

Table 3: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
It is not difficult to comprehend the idea of buying along the uptrend, but it is absolutely difficult to execute this mindset. Of course, there are many other types of method in buying shares, but as long as investors could find a comfortable yet profitable method, he or she should stick to it. Higher-low trend trading is one of them.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Supermx, JCY, Genting

After resisted by the 1440 level, the KLCI retreated slightly and consolidated. However, the uptrend is still intact, as it was lifted by selected heavy weighted blue chips index components. But at the same time, many counters are still trending down, some are even making new low. This suggests that the current uptrend of the market is only selectively while not the entire market is bullish. Therefore, investors should not simply pick up any stocks.

Supermx – 7106: Still in downtrend.

Chart 1: Supermx – 7106 (18/05/2010 ~ 08/09/2010 )

As shown on chart 1, price of Supermx fell below the 14, 21, 31 EMA since 11th of August, and since then, it has been trending down, losing up to RM1.40 or 24%. Despite an attempt of technical rebound, price of Supermx is still resisted by the 14, 21, 31 EMA, which is still serving as the dynamic resistance.

Technically, as long as price of Supermx is still below the 14, 21, 31 EMA, the immediate technical outlook is still bearish biased. Therefore, despite price is getting lower, it is not a good idea to pick up shares that is still falling in a downtrend.

In short, provided that the stock price is still falling below the 14, 21, 31 EMA, there is no ideal buy signal. Technically, an ideal buy signal would be a formation of a higher-low above the 14, 21, 31 EMA. Support for Supermx is at RM4.50~RM4.60, while the resistance is at 14, 21, 31 EMA dynamic resistance.

4 Q Rolling PER	7.24 times	Dividend Yield	2.37%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	11 sen	2.01 %	15.92 %
31/12/2008	3.25 sen	4.06 %	5.58 %
31/12/2007	1.90 sen	0.63 %	13.85 %
31/12/2006	6.50 sen	1.56 %	10.49 %
31/12/2005·	6.50 sen	1.46 %	12.74 %

Table 1: Supermx – 7106, yearly dividend, dividend yield, and net profit ratio.

Revision of last week's case study: JCY - 5161: Still is downtrend.

Chart 2: JCY – 5161 (18/05/2010 ~ 08/09/2010 )

As shown on chart 2, JCY technically rebounded strongly last week, with substantial volume, suggesting some bargain hunting activities. However, as indicated by A, price of JCY is still resisted by the 14, 21, 31 EMA, which is is still serving as the dynamic resistance, and as a result, the downtrend is still intact.

Although many attempted to catch the rebound, and look for short term profit, it is a high risk strategy, because the downtrend is still intact. If price should retreat again, and resumes its downtrend, those who attempt to catch the short term rebound would have been caught by the falling of price.

Technically, there is no ideal buy signal for the moment, and the rebound last week was purely technical rebound, it was not a reversal signal yet, unless price could break above the 14, 21, 31 EMA successfully, and form a Higher-low, which is the first characteristic of an uptrend formation. Nevertheless, immediate support for JCY is at RM0.875 level.

Leading PER	8.259 times	Dividend Yield	0%
Dividend		Earning Per Share
30/06/2009	0 sen	2.72 sen
31/03/2009	3.91 sen	3.22 sen

Table 2: JCY - 5161, quarterly earning and dividend.

Genting – 3182: Uptrend is still intact.

Chart 3: Genting – 3182 (18/05/2010 ~ 08/09/2010 )

Among those heavy weighted blue chip counters which lifted the KLCI, one of them is Genting. As shown on the chart above, price of Genting touched is resistance at RM9.62 and retreated, entering a consolidation stage, but the uptrend is still intact.

The 14, 21, 31 EMA is still serving as the dynamic support for Genting and as long as price is still above the dynamic support, the technical outlook shall remain positive. In other words, investors can choose to hold on to their position, until price should break below the 14, 21, 31 EMA, it would be the signal to cut loss, or the take profit.

Meanwhile, as price is consolidating, investors are staying on the sidelines, and as a result, volume has declined significantly. It is normal to have lower volume during consolidation, but if price should break above its resistance, a substantial volume is needed to confirm the break out.

4 Q Rolling PER	21.82 times	Dividend Yield	0.77 %
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	7.20 sen	1.14 %	11.74 %
31/12/2008	7.00 sen	1.89 %	6.27 %
31/12/2007	37 sen	0.98 %	12.15 %
31/12/2006	32 sen	0.97 %	21.56 %
31/12/2005	29 sen	1.36 %	22.86 %

Table 3: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

Despite KLCI index components are still lifting the KLCI higher, there are many counters still trending down, and by right, investors is best to avoid stocks that are in downtrend. As for catching the rebound, it is a high risk strategy and only suitable for experienced traders.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Maybank, Genting, AMMB

Lead by selective heavy weighted blue chips, the FBM KLCI broke above the 1370 hurdle and now testing the 1400 psychological resistance level. Due to the quick rally of the KLCI, many counters are getting over-heated. As a result, when the KLCI is getting near the 1400 level, investors are cautiously taking profit. Let's study some counters with over-heated conditions.

Maybank - 1155: Over-heated.

Chart 1: Maybank - 1155 (28/04/2010 ~ 18/08/2010 )

As shown on chart 1, price of Maybank broke above the Bollinger Middle Band on the 16th of August, and had a sharp rally, touching the RM8.00 height, making a new high since the 5th of March. As circled at A, with price of Maybank breaking above the 20-day Bollinger Upper band, this suggests that the short term movement of Maybank is over-heated.

Technically, it is not a good level to buy when the stock price is over-heated. This is because when a stock price rally is over-heated, there will be profit taking activities to pull down the price, called pull back effect, which is a form of a technical correction. However, this does not mean that the uptrend is over, it is merely a short term correction or a consolidation.

If price of Maybank should consolidate above the 14, 21, 31 EMA, or the Bollinger Middle Band, this suggests that the uptrend is still intact, and therefore, for investors who had bought their this share, it is a good idea to hold on to their position. As for investors who are interested to take up any position, the ideal entry point would be a formation of higher-low above the 14, 21, 31 EMA, with strong volume. However, immediately after buying, investors should apply the 14, 21, 31 EMA as a trailing stop reference. Immediate resistance for Maybank is at RM8.00 while the next resistance is seen at RM9.00.

4 Q Rolling PER	34 times	Dividend Yield	1%
Dividend		Dividend Yield	Net Profit Ratio
30/06/2009	8 sen	1.36 %	3.93%
30/06/2008	52.5 sen	7.45 %	18.13%
30/06/2007	80 sen	6.67 %	20.95 %
30/06/2006	85 sen	7.94 %	22.07 %
30/06/2005	102.5 sen	9.4 %	22.31 %

Table 1: Maybank - 1155, yearly dividend, dividend yield, and net profit ratio.

Genting – 3182: Expected a Pull-back effect.

Chart 2: Genting – 3182 (28/04/2010 ~ 18/08/2010)

As circled by A, price of Genting broke above the 20-day Bollinger Upper Band after 3 consecutive sharp rally. Technically, when a stock rallied, breaking above and entirely away of the 20-day Bollinger Upper band, it is a sign of an over-heated condition, thus implying that a pullback effect is likely to take place in the near future, as a form of a technical correction.

Although a pullback is expected, the uptrend of Genting is unaffected, as it is still supported by the 14, 21, 31 EMA dynamic support. In other words, for investors who had bought this share, it is a good idea to hold on the position provided that the stock price is still above the 14, 21, 31 EMA, until price should break below the 14, 21, 31 EMA, then it is a signal to cut loss or to take profit.

As for investors who are interested in taking up position on Genting, an ideal buy signal would be a formation of a higher-low after the pullback effect, and the higher lower formation should be above the 14, 21, 31 EMA, together with a strong volume. After buying, he or she shall apply the 14, 21, 31 EMA as the trailing stop reference immediately. Nonetheless, resistance for Genting is seen at RM 9.00 level.

4 Q Rolling PER	30.82 times	Dividend Yield	0.81 %
Dividend		Dividend Yield	Net Profit Ratio
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%
31/12/2005	29 sen	1.36 %	22.86%

Table 2: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.

AMMB – 1015: Uptrend, over-heated.

Chart 3: AMMB – 1015 (28/04/2010 - 18/08/2010)

As circled at A, price of AMMB had a sharp rally, breaking above the 20-day Bollinger upper band, and signaled an over-heated condition, as the stock price of AMMB is totally away from the 20-day Bollinger Upper band. Generally, investors are likely to take profit and the profit taking activities could lower the stock price as a pullback effect.

Despite the over-heated condition, the uptrend of AMMB remains intact, and a pullback effect is only a form of technical correction, or a beginning of a consolidation. Provided that price of AMMB is still supported by the 14, 21, 31 EMA, with strong volume, the uptrend is expected to resume. However, if price of AMMB should break below the 14, 21, 31 EMA after the pullback effect, it would be a signal suggesting that the uptrend is violated. Nevertheless, resistance for AMMB is at RM5.50~RM5.55, while the support is at the 14, 21, 31 EMA dynamic support.

4 Q Rolling PER	14.69 times	Dividend Yield	1.91 %
Dividend		Dividend Yield	Net Profit Ratio
31/03/2009	10.5 sen	2.10 %	14.77%
31/03/2008	8 sen	3.07 %	14.69%
31/03/2007	6 sen	1.74 %	11.13%
31/03/2006	5 sen	1.33 %	-3.38%
31/03/2005	4 sen	1.77 %	7.34%

Table 3: AMMB – 1015, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Whenever a stock price breaks above the 20-day Bollinger Upper Band (especially for blue chip counters), it is a sign of an over-heated condition, suggesting that a pullback effect is likely to take place in the near future as a form of a technical correction. However, this does not mean that the uptrend will be violated. If the stock price should consolidate after the pullback or rebound from the dynamic support, the uptrend is still unaffected.

Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。