Scomi, JCY, EO

As shown on chart 1, the KLCI rebounded from the 14, 21, 31 EMA, suggesting that the uptrend is still intact. Meanwhile, total market volume increased, while staying above the 40-day VMA level. This suggests the market participation is getting better, and generally it would also lift the market sentiment.

Chart 1: KLCI

Revision of last week's Case Study: Scomi – 7158 : Breaking above RM0.42 resistance.

Chart 2: Scomi – 7158 (31/03/2010 ~ 21/07/2010)

As indicated by A, price of Scomi breaks above RM0.42 resistance, but failed to closed firmly higher. Therefore, the break out is yet to be confirmed. Nevertheless, the upside biased movement is still intact, since price of Scomi is already above the 14, 21, 31 EMA.

Technically, now that price of Scomi is taking amild consolidation, with low volume, this suggests that the consolidation is a healthy one as no panic selling is sighted. If price should rebound from the 14, 21, 31 EMA, with strong volume, it would form a higher-low, thus an uptrend is formed, and the next resistance is at RM0.46 level while the 14, 21, 31 EMA is still serving as the dynamic support.

4 Q Rolling PER	33.73 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0 %	0.5 %
31/12/2008	0.5 sen	1.49 %	5.53%
31/12/2007	1.25 sen	1.10 %	3.58 %
31/12/2006	1.50 sen	1.49%	5.37 %
31/12/2005	1.20 sen	1.20 %	16.19 %

Table 1:Scomi – 7158, yearly dividend, dividend yield, and net profit ratio.

JCY – 5161: Consolidating.

Chart 3:JCY – 5161 (31/03/2009 ~ 21/07/2010)

After falling from its peak of RM 1.98, price of JCY has been falling for about 3 months and now consolidating in sideways movement. As indicated by A, the Bollinger Bands contracts, as the volatility of price reduces, this suggests that JCY is also preparing for a new movement.

Technically, the consolidation is expected to carry on until the Bollinger Bands re-expands. If the Bollinger Bands should re-expand, with price of JCY above the Bollinger Middle Band, it would be a bullish biased signal. However, if the Bollinger Bands should re-expands with price of JCY below the Bollinger Middle Band, it would be a weak signal and more downside movement is expected. Meanwhile, if JCY should fall below RM1.44, it would be making a new low, and it is a signal to cut loss.

Continue on previous Case Study: E&O – 3417]: Break away from downtrend.

Chart 4: E&O – 3417 (24/12/2009 ~ 21/07/2010)

As indicated by A, price of E&O broke above the L1 downtrend line, breaking away from the downtrend. It touched its peak of RM1.04 before retreated as profit taking took place.

Technically, it is normal to have a retreat of price but provided that it is still supported by the 14, 21, 31 EMA, the uptrend shall remains intact. When price should rebound and form a higher-low, with strong volume, it would means a resumes of an uptrend, and the 14, 21, 31 EMA shall continue serving as the dynamic support as well as a trailing stop reference.

In other words, for those who had bought at the break out of L1 line, it is a good idea to hold the stock, all the way until price should break below the 14, 21, 31 EMA. As for new interested buyers, the ideal entry point would be a higher-low formation, with strong volume. Nevertheless, next resistance is at RM1.02~RM1.03 followed by RM1.07~RM1.10 level.

4 Q Rolling PER	14.94 times	Dividend Yield	3.82%
Dividend		Dividend Yield	Net Profit Ratio
31/03/2010	3.8 sen	4.29%	20.12%
31/03/2009	0 sen	0%	-12.45%
31/03/2008	5 sen	2.78%	24.95%
31/03/2007	4 sen	1.84%	5.76%
31/03/2006	0 sen	0%	12.93%

Table 3: E&O – 3417,yearly dividend, dividend yield, and net profit ratio.

Conclusion:

From the above case studies, it proves that it is a better idea to buy stocks which are trending up or started to trend up after breaking away from its downtrend. If one should buy too early, during a sideways market or a correction, he or she could have bought at the end of a uptrend or a beginning of a downtrend. Buy when the price is up, and apply trailing stop using 14, 21, 31 EMA, it would help investors reduce trading risk.

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。

Scomi, Zelan, TA.

After returning to above the 200-day Moving Average, the KLCI has broken away from its downtrend formation. However, total market volume remains low (below the 40-day VMA level). This shows that the market confidence is relatively low. We shall continue to study some stocks, and look for their technical condition.

Revision of Last week's case study: Scomi – 7158: Testing the T1 downtrend line.

Chart 1: Scomi - 7158]（23/02/2010～16/06/2010）

As indicated by A, Scomi is still testing the T1 downtrend, and it is likely that it would break away from the T1 downtrend line. However, it has not broken above the 14, 21, 31 EMA (Exponential Moving Average) thus the technical outlook shall remains weak.

Technically, if Scomi should consolidate sideways, which is an improvement if compared to the T1 downtrend condition. Therefore, it is easier to rally after a sideways consolidation, this is because when stock is trading at a sideways movement, there were not many losers, thus the fear is not strong. But still, strong volume is needed to push price higher.

Nevertheless, since it has not shown any bullish signal, traders and investors should wait patiently for the signal and avoid buying too early. Technically, if price should break above the 14, 21, 31 EMA with strong volume, it would be a positive signal to buy, and the 14, 21, 31 EMA would be serving as a dynamic support as well as a trailing stop reference. Immediate support for Scomi is at RM0.375 while the resistance is at RM0.45～RM0.46.

4 Q Rolling PER	31.35 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0%	0.5%
31/12/2008	0.50 sen	1.49%	5.53%
31/12/2007	1.25sen	1.10%	3.58%
31/12/2006	1.50sen	1.49%	5.37%
31/12/2005	1.20sen	1.20%	16.19%

Table 1: Scomi – 7158, yearly dividend, dividend yield, and net p

rofit ratio.

Zelan – 2283: Still in long term downtrend.

Chart 2:Zelan – 2283 (08/6/2009～16/06/2010)

As shown on chart 2, price of Zelan rebounded from RM0.445, but still remains below the T1 downtrend line. Therefore, technically, the downtrend remains intact. Technically, price has to break above the 14, 21, 31 EMA with strong volume in order to show some strength, then price has to break above the T1 line to break away from the downtrend. Therefore, any rebound below the T1 downtrend is only a technical rebound, and not yet a reversal.

However, since price is now further below the T1 downtrend line, some traders might want to take advantage of the technical rebound as a short term trading. However, it is important to watch out for the T1 line, and if price should retreat at the T1 line, it is a signal to take profit. Short term trading is generally a high risk trading method, and not suitable for inexperienced traders nor conservative investors. Nevertheless, support for Zelan is at RM0.445 while the resistance is at RM0.60 WinChart Automatic Fibonacci Retracement.

4 Q Rolling PER	0 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/03/2010	0 sen	0 %	-24.77 %
31/03/2009	5 sen	8.93 %	-7.33 %
31/03/2008	14 sen	6.76 %	-1.30 %
31/03/2007	15 sen	1.88 %	12.60 %
31/03/2006	10 sen	2.96 %	14.47 %

Table 2:Zelan - 2283, yearly dividend, dividend yield, and net profit ratio.

TA – 4898 : Breaking away from the Downtrend, still waiting for uptrend condition.

Chart 3: TA – 4898 (23/11/2009～16/06/2010)

As indicated by A, price of TA rebounded at RM0.62 level, breaking above the 14, 21, 31 EMA as well as the T1 downtrend line.

Although TA has broken above the T1 line, it has not shown a reversal yet. Technically, after breaking above the T1 line, if price should retreat, the volume has to be low, this suggests that the selling pressure is not huge. Then, price would have to form a higher low with strong volume, suggesting some inflow of fresh buying interests, and the 14, 21, 31 EMA would be serving as a trailing stop reference.

The above mentioned conditions are the most ideal technical condition of a reversal, and if the broad market sentiment should improve, the reversal would be more assure. Again, it is important to wait for all the conditions before taking up any position. Immediate support for TA is at RM0.62 and the next resistance is at RM 0.705～RM0.71.

4 Q Rolling PER	12.43 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/1/2010	0 sen	0%	20.89%
31/1/2009	4.5 sen	7.32	16.94%
31/1/2008	10 sen	7.94%	41.33%
31/1/2007	7 sen	7.95%	36.94%
31/1/200	3 sen	6.34%	25.54%

Table 3: TA – 4898, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Volume is an important factor of a rally. When volume increases, it suggests that the inflow of fresh capital is increasing. If price should rally with strong volume, it means that new buyers are taking the seller's price, and sellers are selling with premium. Therefore, if this condition remains, an uptrend will form.

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。

Scomi, Mphb, KNM

Since falling from 1349.92 points, the KLCI has been falling for almost one month. However, many counters has been falling for over two months, losing more than 20% in value, and until now, still staying in downtrend. What are the technical conditions for a reversal? What is the characteristic of a reversal? Let's take a look at some counters and look out for some of these characteristics.

Scomi – 7158: Testing downtrend line.

Chart 1: Scomi – 7158 (05/02/2010～02/06/2010)

As shown on chart 1, price of Scomi formed a downtrend for two months, while during this downtrend, a few technical rebounds took place, but failed to break above the T1 downtrend line.

As indicated by A, now that price of Scomi is testing the T1 line again, it is a crucial timing. If price should break above the T1 line and then breaking above the 14, 21, 31 EMA, it would break away from this downtrend. But strong volume is needed to confirm such break out.

On the other hand, if volume should remain low, there is a risk of a false break out, as the buying interests is insufficient to off set the selling pressure. Nevertheless, support for Scomi at RM0.36~RM0.38 level.

4 Q Rolling PER	10.62	Dividend Yield	1.72%
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	1.90sen	0.63%	13.85%
31/12/2006	6.50sen	1.56%	10.49%
31/12/2005	6.50sen	1.46%	12.74%

Table 1: Scomi – 7158, yearly dividend, dividend yield, and net profit ratio.

MPHB – 3859: Downtrend, testing the downtrend line.

Chart 2: MPHB – 3859 (09/1/2009～02/06/2010)

As shown on chart 2, price of MPHB has formed a T1 downtrend for more than 2 months. During this downtrend, a few technical rebound took place, but failed to break above the T1 downtrend line, and formed lower-highs repeatedly, thus re-affirming the downtrend.

Now that price of MPHB is testing the T1 line and the 14, 21, 31 EMA again, it is a crucial point. If price should break above the T1 and the 14, 21, 31 EMA, with strong volume, it would break away from this downtrend, and stand a chance of a reversal. Then, the 14, 21, 31 EMA would be serving as dynamic support instead.

However, if price should break above the T1 and the 14, 21, 31 EMA with low volume, there is a bigger chance that price would prolong its sideways consolidation after breaking above the T1 line and the 14, 21, 31EMA, or a chance of a false breakout. If price should failed to break above the T1 line, and started falling again, it would form yet another lower-high, with weak technical outlook. Support for MPHB are at RM1.88~1.90 and the next support is at RM1.80.

4 Q Rolling PER	5.89 times	Dividend Yield	4.52%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	9 sen	4.66 %	10.15 %
31/12/2008	10 sen	9.26 %	4.31 %
31/12/2007	11 sen	4.74 %	11.71 %
31/12/2006	0 sen	0%	36.54%
31/12/2005	0 sen	0%	-69.12%

Table 2: MPHB – 3859, yearly dividend, dividend yield, and net profit ratio.

Revision of last week's Case Study: KNM – 7164: Consolidating with weak biased.

Chart 3: KNM – 7164 (05/02/2010～02/06/2010)

As shown on chart 3, price of KNM is moving sideways around the RM0.50 level, in narrow range. As a result, the Bollinger Bands contracts, suggesting not only a consolidation signal, but that KNM is also preparing for a new movement, and the direction of the new movement shall be revealed once the Bollinger Bands re-expands.

Technically, when the Bollinger Bands has contracted for a period of time, its re-expansion signal is usually clearer. If price should stay above the Bollinger Middle Band as the Bollinger Bands re-expand, it would be a positive signal, then if investors choose to buy, they shall apply the Bollinger Middle Band as a trailing stop reference. On the other hand, if price should stay below the Bollinger Middle Band, as the Bollinger Bands expands, it would be a bearish signal. Immediate support for KNM is at RM0.47. If price should break below this support, it would be making a 15 months new low.

4 Q Rolling PER	17.31 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0%	9.37%
31/12/2008	1.5 sen	3.70%	13.30%
31/12/2007	4.0 sen	1.27%	9.37%
31/12/2006	5.0 sen	0.57%	14.56%
31/12/2005	5.0 sen	1.40%	11.97%

Table 3: KNM – 7164, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Generally, the most ideal reversal pattern consists of the following, a valid technical rebound which break above the downtrend line or the dynamic resistance, with strong volume, then a formation of a higher-low, with strong volume. Strong volume is needed for it represents more inflow of fresh capital to off set the selling pressure.

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。