Case Studies Unisem. MKland, Leader.

After making a new high for nearly two years, the KLCI started its technical correction. As the broad market having its correction, many individual counters are also having a similar correction.

Unisem-5005: Remains in uptrend.

Chart1: Unisem-5005 (15/12/2009～14/04/2010)

As indicated by A, price of Unisem has been supported by the 14, 21, 31 EMA, and the uptrend remains intact. Meanwhile, it has broken above several new highs. As indicated by B, whenever price broke new high, volume increased significantly, which provide the required uptrend technical condition.

Currently, price of Unisem is testing the RM3.22 resistance level. If price should break above the RM3.22 level with strong volume, it would mark another new high, thus the 14, 21, 31 EMA shall continue serving as the dynamic support as well as the trailing stop reference.

In other words, provided that price of Unisem is still supported by the rising 14, 21, 31 EMA, investors can choose to hold, all the way until price should break below the 14, 21, 31 EMA, then, it would be a signal to take profit or the cut loss.

4 Q Rolling PER	25.17 times	Dividend Yield	0.83%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	2.5 sen	1.14%	5.97%
31/12/2008	2.5 sen	3.57%	1.61%
31/12/2007	10 sen	6.06%	12.25%
31/12/2006	10 sen	6.06%	10.38%
31/12/2005	8 sen	5.76%	3.92%

Table 1: Unisem, yearly dividend, dividend yield, and net profit ratio.

MKLand-8893：Might be forming a higher-low.

Chart 2: MKLand-8893 (15/12/2009～14/04/2010)

As shown on chart 2, price of MKLand broke above the RM0.37 resistance level, but due to profit taking activities, price of MKLand failed to stay above the RM0.37 level, and pulled back, breaking below the RM0.37 again. However, as indicated by A, price of MKLand managed to found its temporay support at the 14, 21, 31 EMA. This suggests that the 14, 21, 31 EMA is still serving as the dynamic support.

Meanwhile, as indicated by B, as price pulled back, volume declined, suggesting that the selling pressure was not huge, and technical, this is a healthy pullback.

If price should rebound from the 14, 21, 31 EMA, it would form another Higher-low, thus a good chance to resume its uptrend, and re-test the RM0.37 resistance line. But it has to be confirmed with a strong volume, then the 14, 21, 31 EMA shall continue serving as the dynamic support as well as the trailing stop reference. However, if price should break below the 14, 21, 31 EMA, it would be an up of the uptrend, thus a signal to cut loss. Next support is seen at RM0.32 level while the next resistance is found at RM0.46 level.

4 Q Rolling PER	33.18 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
30/06/2009	0 sen	0%	7.42%
30/06/2008	0 sen	0%	-41.02%
30/06/2007	0 sen	0%	5.12%
30/06/2006	1 sen	1.49%	11.57%
30/06/2005	4 sen	3.64%	13.28%

Table 2: MKLand-8893, yearly dividend, dividend yield, and net profit ratio.

Leader-4529 : Consolidation within an uptrend.

Chart 3:Leader-4529 (15/12/2009～14/04/2010)

After breaking above the Ascending Triangle, price of Leader has been consolidating for about two weeks, and currently preparing for its new movement. Technically, now is the time to use the Bollinger Bands to monitor its consolidation. This is because when the Bollinger Bands contracted for a certain period of time, the re-expansion signal is usually much clearer.

In other words, if the Bollinger Bands should re-expand, it would mark an end to the consolidation, and a beginning of a new movement. If price should stay above the Bollinger Middle Band, it would be a bullish signal, and the uptrend shall resume. If price should stay below the Bollinger Middle Band, it would be a bearish signal, thus a signal suggesting some profit taking.

As indicated by A, if price of Leader should stay above the Bollinger Middle Band, then, the 14, 21, 31 EMA shall continue serving as the dynamic support as well as the trailing stop reference. Next resistance for Leader is seen at RM1.05 level while the support is at RM1.00 psychological level.

4 Q Rolling PER	27.87 times	Dividend Yield	2.45%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	2.5 sen	2.72%	0.64%
31/12/2008	2.5 sen	2.53%	1.02%
31/12/2007	4.5 sen	1.20%	4.94%
31/12/2006	7.5 sen	2.88%	3.06%
31/12/2005	4 sen	5.76%	2.68%

Table 3: Leader, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

As the broad market started its technical correction, many individual counters will have a similar correction. However, investor not to over-worry as a correction is needed after a rally. Provided one should know how to apply a trialing stop properly and know when to get out, the trading risk is pretty much controlled by individual.

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。

Case Studies: Faber, Leader, Unisem.

In the field of Technical Analysis, there are Chart Patterns, Primary Indicators, and Secondary Indicators, with Chart Pattern being the most important part. For chart patterns, there are reversal patterns and consolidation patterns. For Primary Indicators, we have the Bollinger Bands and the Moving Average; and as for the Secondary Indicators, it includes MACD, Stochastic, and etc. This week, we shall take a look at some case studies with chart pattern and Primary Indicators.

Faber: Uptrend Consolidation:

Chart 1: Faber, from 16/11/2009 to 17/03/2010.

As shown on chart 1, price of Faber was trending up, but temporary has found a resistance at RM2.08 level, thus price went into a consolidation. As indicated by A, the Bollinger Bands contracted, suggesting a consolidation signal for Faber, and at the same time, implying that Faber is now gearing up for a new movement.

When the Bollinger Bands re-expands, it would be a signal suggesting a beginning of a new movement. If price should remain above the Bollinger Middle Band as the Bollinger Bands re-expands, it would be a bullish signal, suggesting that Faber is likely to resume its uptrend. On the other hand, if price should stay below the Bollinger Middle Band as the Bollinger Bands expands, it would be a bearish signal, thus a signal to take profit or to cut loss, for the next support is seen at RM 1.80 level.

4 Q Rolling PER	8.78 times	Dividend Yield	3%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	6 sen	3.61%	10.27%
31/12/2008	4 sen	5.97%	23.29%
31/12/2007	0 sen	0%	7.76%
31/12/2006	0 sen	0%	5.95%
31/12/2005	0 sen	0%	5.98%

Table 1: Faber, yearly dividend, dividend yield, and net profit ratio.

Leader: Uptrend testing resistance.

Chart 2: Leader , from 16/11/2009 to 17/03/2010.

The T1 line as shown on chart 2 represents the uptrend line of Leader, but the resistance is at RM0.93 level. Therefore, price of Leader is forming an Ascending Triangle. An Ascending Triangle itself is a mid term uptrend pattern, but with a limited upside room capped by the resistance line. It has some bullish movement tendency but ultimately, it is the bullish break out above the resistance line that matters most. The RM0.93 resistance suggests some negative memories of traders, as it is a level where profit taking is likely to take place.

Technically, price has to break above the RM0.96 level, and then the T1 line should continue serving as the uptrend support line. Nevertheless, a bullish break out above the RM0.96 level has to be accompanied by strong volume, and the next resistance is seen at RM 1.00 level.

In contrary, if price should retreat now and break below the T1 line, it would mark an end to the mid term uptrend movement. Therefore, it would be a signal to take profit or to cut loss.

4 Q Rolling PER	7.35 times	Dividend Yield	3.33%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	3 sen	3.31%	2.74%
31/12/2008	3 sen	6.82%	2.56%
31/12/2007	3 sen	2.75%	2.34%
31/12/2006	1.5 sen	2.65%	1.49%
31/12/2005	0 sen	0%	1.37%

Table 2: Leader, yearly dividend, dividend yield, and net profit ratio.

Unisem: Testing Resistance.

Chart 3: Unisem, from 16/11/2009 to 17/03/2010.

As shown on chart 3, price of Unisem was resisted by the RM 2.60 level, forming a Double Top pattern. A double Pattern suggests that investors have memory in the previous resistance level, and price is capped by this memory during a second rally, and as these investors take profit, price began falling, thus forming a Double Top.

Despite forming a Double Top pattern, as indicated by A, price of Unisem is still supported by the 14, 21, 31 EMA, which is serving as the dynamic support for the uptrend. But the upside room is still limited, unless price should break above the RM 2.60 level, with substantial volume.

Technical, a valid bullish break out should have strong volume together with price breaking above a resistance line. Meanwhile, investors can continue using the 14, 21, 31 EMA as the trailing guideline and provided that price is still staying above the 14, 21, 31 EMA, it is a good idea to hold, until price should break below the 14, 21, 31 EMA, it would be a signal to cut loss, or to take profit.

4 Q Rolling PER	7.35 times	Dividend Yield	3.33%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	2.5 sen	1.14%	5.97%
31/12/2008	2.5 sen	3.57%	1.61%
31/12/2007	10 sen	6.06%	12.25%
31/12/2006	10 sen	6.06%	10.38%
31/12/2005	8 sen	5.76%	3.92%

Table 3: Unisem, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Chart Patterns, Primary and Secondary Indicators often produce contradictory signals, and therefore, an analyst has to determine when is the best time to use different method or indicator, to suit different market conditions.

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。