JCY, Axiata, KNM

Despite the KLCI marked a 30 months new high, many counters are still falling while some even makes new low. Therefore, this shows that the recent rally is rather selectively on some heavy weighted index components while the overall market is not as much bullish.

Revision of Last week's Case Study: JCY - 5161: New Low again.

Chart 1: JCY - 5161 (11/05/2010 ~ 01/09/2010 )

As shown on chart 1, price of JCY is still falling, and breaking another historical new low, thus the downtrend remains intact and the 14, 21, 31 EMA is still serving as the dynamic resistance. Technical outlook for JCY is bearish.

As indicated by A, when price falls, volume increased significantly, this suggests that the selling pressure was high and seller rushed to sell off their share to new buyers whom are only willing to take up position at a lower price.

In short, heavy volume during a downtrend will further dampen the bearish sentiment on this counter, thus investors are urged not to try to catch the bottom, despite the falling of price, which appears to be cheap. Since price is breaking new low, no valid support is seen right now.

Leading PER	6.9 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 1: JCY - 5161, Quarterly Dividend and Earning per Share.

Axiata – 6888: Uptrend continues, and new high.

Table 2: Axiata – 6888 (11/05/2010 ~ 01/09/2010)

Recently, the KLCI has been lifted by some heavy weighted index components, and one of them is Axiata. As shown on chart 2, price of Axiata remains above the 14, 21, 31 EMA, thus the uptrend remains intact.

In other words, for those who already bought this counter, it is a good idea to hold on to the position, until price should break below the 14, 21, 31 EMA, then it is a signal to take profit or the cut loss. As for those who are interested in taking up position, the idea entry point would be a formation of a higher-low; then, he or she must apply the 14, 21, 31 EMA as the trailing stop reference.

Nevertheless, as Axiata is breaking new high, next resistance for Axiata is at RM4.70 followed by RM5.00 level, while the 14, 21, 31 EMA is still serving as the dynamic support.

4 Q Rolling PER	14.68 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0 %	12.61%
31/12/2008	0 sen	0 %	4.39 %

Table 2: Axiata – 6888, yearly dividend, dividend yield, and net profit ratio.

KNM – 7164: New low.

Table 3: KNM – 7164 (11/05/2010 - 01/09/2010)

As shown on chart 3, KNM has been moving sideways above the RM0.48~RM0.50 level for about 3 months, and this has built up a considerable memory for traders ( either those who are holding or who are watching on the sidelines). As indicated by A, price breaks below the RM0.48~RM0.50 support, making a new low. This means that all these investors who had bought at around RM0.48~RM0.50 in the past 3 months are all turning their profit (if any) into losses, thus creating a big negative impact.

It is devastating to think that this massive fall of share price is a big discount, and when one should start buying while price started to fall, he is trading against the trend. This is because all these traders who had bought this share earlier are mostly wanted to break even, hence the selling pressure is strong.

Technically, provided that price is still staying below the 14, 21, 31 EMA, the technical outlook for KNM is on the negative side, and despite the falling of share price, there is no reliable support level for now.

4 Q Rolling PER	31.43 times	Dividend Yield	0 %
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0 %	9.37%
31/12/2008	1.5 sen	3.7 %	13.30%
31/12/2007	4.0 sen	0.52 %	16.29%
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:
Technical analysis is not just only a statistic of price movement, it also reflects traders' memory as well as psychology. One does not only study himself when he decides to take up a new position, he has to study what the losers or the winners are taking, and what losers and winners wants. Therefore, this explains why we need to trade with a trend, and avoid trading against it.

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。

JCY, KPJ, Zelan

The KLCI resumed its uptrend, breaking above the 1350 level, making a 18 months new high. Concurrently, total market volume increased and stays firmly above the 40-day VMA level, suggesting an improvement of the market sentiment as a whole. However, there are still many counters staying in downtrend, some are even making new low. Therefore, investors should be careful in picking up stocks. Let's take a look at some case studies.

JCY – 5161: New Low.

Chart 1: JCY – 5161 (07/04/2010～28/07/2010)

As shown on chart 1, price of JCY fell below its lowest RM1.44 level, breaking a new low. As indicated by A, the 14, 21, 31 EMA is now serving as the dynamic resistance for JCY, it is in downtrend.

Technically, when price break new low, it means that all investors who had bought and are still holding their share are all making losses, even for those who bought at the lowest price. Therefore, with so many losers holding their shares, the emotion of fear is stronger, as most of these share holders wants to break even, thus the selling pressure for a new low stock is usually very high.

Nevertheless, since JCY is making a historical new low, we can't find a reliable support at the moment, until a valid rebound. But provided that price is still resisted by the 14, 21, 31 EMA, the downtrend remains intact, and the technical outlook remains bearish biased.

KPJ – 5878: Still in uptrend.

Chart 2: KPJ – 5878 (07/04/2010～28/07/2010)

As shown on chart 2, KPJ price has returned to above the 14, 21, 31 EMA since 27th of May, and until now, it is still trending in uptrend. Although, in the end of June, price retreated as a technical correction, it managed to rebound from the 14, 21, 31 EMA, and later resume its uptrend, even breaking above the RM3.45 resistance and marked a new high.

As indicated by A, it tested its high on the 23rd of July, at RM3.85. Generally, the first target of the correction is at the 14, 21, 31 EMA, and if price should rebound from the 14, 21, 31 EMA, it would resume its uptrend, and as long as the uptrend is still intact, it is a good idea to hold on the the positions.

As for investors who are looking for buy signal, an ideal entry signal would be the next higher-low, and after taking the position, it is crucial to apply the 14, 21, 31 EMA as a trailing stop reference. Nonetheless, the immediate resistance is at RM3.85.

4 Q Rolling PER	8.32 times	Dividend Yield	5.51%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	20 sen	8.3 %	7.04 %
31/12/2008	7 sen	2.75 %	6.18 %
31/12/2007	19.59 sen	5.66 %	6.70 %
31/12/2006	14 sen	7 %	5.08 %
31/12/2005	8 sen	5.30 %	5.30 %

Table 2: KPJ – 5878, yearly dividend, dividend yield, and net profit ratio.

Revision of Last Week's Case Study: Zelan – 2283: Technical Correction.

Chart 3: Zelan – 2283 (07/04/2010～28/07/2010)

As shown on the chart 3, after breaking above 14, 21, 31 EMA in early July, price of Zelan has been trending up, even breaking above the L1 downtrend line, and formed an uptrend, with the 14, 21, 31 Ema serving as the dynamic support.

As indicated by A, after breaking L1 downtrend, it hit its peak of RM0.71, and started to fall back as profit taking kicked in. Technically, it is rather normal, and the first target of the correction is at the 14, 1, 31 EMA. If price should rebound from the 14, 21, 31 EMA, it would form another higher low, thus a good chance to resume this uptrend. Of course, a strong volume is needed to confirm the uptrend. Therefore, it would be an ideal buy signal, with the 14, 21, 31 EMA as the trailing stop reference.

In other words, provided that the stock price is supported by the 14, 21, 31 EMA, it is a good idea to hold on to the positions, until which price should break below the 14, 21, 31 EMA, it would be a signal to take profit. Next resistance of Zelan is seen at RM0.81~RM0.82.

4 Q Rolling PER	0 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/3/2010	0 sen	0%	-24.77%
31/3/2009	5 sen	8.93%	-7.33%
31/3/2008	14 sen	6.76%	-1.30%
31/3/2007	15 sen	1.88%	12.60%
31/3/2006	10 sen	2.96%	14.47%

Table 3: Zelan – 2283, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
The above case studies proved again, that buying on the uptrend is very important. However, most investors are still subscribed to the average idea, that buying a stock should be at a lower price, thus limiting themselves in choosing counters at very low price, or a counter in downtrend. In short, selling pressure is higher in a downtrend stock, thus the risk is higher.

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。