Topglov, Supermx, Kossan, Latexx

Since entering the bull run in March 2009, other than blue chips, the we could easily recall the glory days of rubber and gloves stocks. However, can they still shine like before?

Revision of Last week's Case Study: Topglov: Breaking below RM5.50 support.

Chart 1: Topglov – 7113 (01/06/2009～22/09/2010)

As shown on chart 1, price of Topglov fell below RM5.50 support level, breaking a 9 months new low. This is a typical downtrend formation as it was forming lower-highs, in which the peak of 14th September was lower than the peak of 25th of August, and now that price is breaking below RM5.50, the downtrend characteristic is load and clear.

Meanwhile, since breaking below the 14, 21, 31 EMA on the 22nd of July, price of Topglov stayed below the 14, 21, 31 EMA, with weak technical outlook. In other words, all invests who bought below the 14, 21, 31 EMA and if they are still holding now, are losing money. Therefore, many of these losers will have a mind set to wanting to break even, thus creating more selling pressure. The 14, 21, 31 EMA shall remain as the dynamic resistance.

As long as the above mentioned criteria are still intact, together with negative memory of investors, the downtrend is expected to continue. Support for Topglov is at RM4.50 while the resistance is at the 14, 21, 31 EMA.

4 Q Rolling PER	6.46 times	Dividend Yield	3.96%
Dividend		Dividend Yield	Net Profit Ratio
31/08/2009	22 sen	3.17 %	11.04 %
31/08/2008	11 sen	2.71 %	8.01 %
31/08/2007	9.22 sen	1.31 %	8.38 %
31/08/2006	9.00 sen	1.04 %	7.90 %
31/08/2005	8.00 sen	1.60 %	9.06 %

Table 1: Topglov – 7113, yearly dividend, dividend yield, and net profit ratio.

Supermx – 7106: Still in downtrend.

Chart 2: Supermx - 710601/06/2010～22/09/2010)

As shown on chart 2, price of Supermx fell below the 14, 21, 31 EMA on the 9thof August, and until now, it is still trading below the 14, 21, 31 EMA. Despite losing up to RM2.30 or 36% in value, technically, there is no ideal buy signal.

Based on the chart reading, current support for Supermx is at RM3.90, and there is a chance of a technical rebound at this level. However, technically, all rebound below the 14, 21, 31 EMA is only considered as a technical rebound, but not a trend reversal. Any one attempt to catch the rebound has to have a trading plan, just in case price should retreat again and break below the RM3.90 level.

As for an ideal buy signal, price has to break above the 14, 21, 31 EMA, and form a higher-low with strong volume.

4 Q Rolling PER	6.54 times	Dividend Yield	2.63%
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 2: Supermx – 7106, yearly dividend, dividend yield, and net profit ratio.

Kossan – 7153: Downtrend intact.

Chart 3: Kossan – 7153 (01/06/2010～22/09/2010)

As shown on chart 3, since price of Kossan fell below the 14, 21, 31 EMA on the 2ndof August, it has been trending down below the 14, 21, 31 EMA. As indicated by A, despite a technical rebound, it hit the 14, 21, 31 EMA, and failed to break away from its downtrend, and later even breaking below the RM3.15 support. Therefore, the downtrend is still intact.

Next support for Kossan is at RM2.93~RM3.00 level, and there is a chance that price could rebound from this level, or consolidate there. However, as long as price is still below the 14, 21, 31 EMA, the technical outlook remains weak, and no ideal buying signal.

Although there is no ideal buy signals, a skilled trader would have stayed away from this downtrend, and avoid losing money in this downtrend, which is a big step forward in becoming a professional investor.

4 Q Rolling PER	7.66 times	Dividend Yield	1.63 %
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	5.13 sen	0.75 %	8.04 %
31/12/2008	6 sen	2.14 %	6.63 %
31/12/2007	5.82 sen	0.75 %	8.03 %
31/12/2006	0 sen	0 %	6.90 %
31/12/2005	6 sen	3.08 %	7.59 %

Table 3: Kossan – 7153, yearly dividend, dividend yield, and net profit ratio.

Latexx – 7064: Downtrend intact.

Chart 4: Latexx – 7064 01/06/2010～22/09/2010)

As shown on chart 4, price of Latexx fell below the 14, 21, 31 EMA since 9th of August, and until now, it has fallen RM0.92 or 26% in share price. In addition, there was a rebound on the 9th of September, but price failed to break above the 14, 21, 31 EMA, thus the downtrend remains intact, and later on, price even fell below the RM2.86 support, making a new low, which continued its downtrend.

To some investors, when price is falling, it may appears that the market is giving him or her a big discount. But in reality, as long as price of Latexx is still below the 14, 21, 31 EMA, the selling pressure is higher than buying interest. This is because those who are losing money in this downtrend are most likely to be the ready sellers who wanted to break even, thus creating a strong selling pressure.

4 Q Rolling PER	11.05 times	Dividend Yield	0.74 %
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	2 sen	0.53 %	15.86 %
31/12/2008	0 sen	0 %	6.97 %
31/12/2007	0 sen	0 %	3.40 %
31/12/2006	0 sen	0 %	2.79 %
31/12/2005	0 sen	0 %	3.35 %

Table 4: Latexx – 7064, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

It is important that an investor to understand that market leaders and theme do change. Therefore, other than following the broad market, picking up the right counters from the right theme is also important. As for glove and rubber stocks, even if their price should return to their original level before the 2009 rally, it might not be a good level to pick them up, for the next rally could be a totally different theme.

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。

Airasia, XDL, Supermx

The KLCI broke above the 1370 level, and now heading to 1400 psychological resistance level. With the broad market trending up, many counters are also forming uptrend, some are breaking new highs. But should investors take profit now? Or should they continue to ride with the uptrend? Here are some case studies.

Airasia – 5099: 32 months new high.

Chart 1: Airasia – 5099 (28/04/2010～18/08/2010)

As shown on chart 1, price of Airasia rebounded from the 14, 21 ,31 EMA (Exponential Moving Average – EMA ) on the 13th of August, and later resumed its uptrend, breaking above the RM1.70 level, making a 32 months new high.

However, after breaking above the RM1.70 level, price of Airasia failed to continued its rally, and started to move sideways. But still, based on the analysis of chart 1, the uptrend of Airasia is still intact, with the 14, 21, 31 EMA still serving as the dynamic support. Therefore, it is a good idea to hold on the the position as long as the price of Airasia is above the 14, 21, 31 EMA, until price should break below the 14, 21, 31 EMA, it would be a signal to cut loss or to take profit.

As for investors whom are interested in taking up position, the ideal entry point would be a higher-low, above the 14, 21, 31 EMA with strong volume, and immediately after buying, he or she should apply the 14, 21, 31 EMA as a trailing stop reference. Nonetheless, resistance for Airasia is at RM1.72~RM1.75 level.

4 Q Rolling PER	6.8 times	Dividend Y ield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0 %	17.27 %
31/12/2008	0 sen	0 %	-17.87%
31/12/2007	0 sen	0 %	38.90 %
31/12/2006	0 sen	0 %	31.07 %
31/12/2005	0 sen	0 %	10.25 %

Table 1: Airasia – 5099, yearly dividend, dividend yield, and net profit ratio.

XDL – 5156: Correction during an uptrend.

Chart 2: XDL – 5156 (28/04/2010～ 18/08/2010)

As shown on chart 2, price of XDL formed an uptrend, marked T1, while continue being supported by the 14, 21, 31 EMA. Thus the 14, 21, 31 EMA is also serving as the dynamic support for XDL.

Despite price of XDL retreated after hitting a resistance at RM0.515, the uptrend remains unaffected, as long as price of XDL could remain above the 14, 21, 31 EMA or the T1 uptrend line. In fact, if price should rebound from the 14, 21, 31 EMA or the T1 line and form a higher-low, with volume, it would be another buy signal, for the uptrend is likely to continue. But immediately after buying, investors should apply the 14, 21, 31 EMA as the trailing stop reference.

However, on the other hand, if price should break below the 14, 21, 31 EMA or the T1 line after this technical correction, it means that the uptrend is violated, and therefore, is is a signal to take profit or the cut loss. This is to avoid being caught by the falling of price. Resistance for XDL is at RM0.515 while the support is at RM0.42.

Leading PER	2.69 times	Dividend Yield	0.00%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	0 sen	0%	17.77 %

Table 2: XDL – 5156, yearly dividend, dividend yield, and net profit ratio.

Supermx – 7106: Breaking below long term uptrend.

Chart 3: Supermx – 7106 (28/04/2010～18/08/2010)

As shown on chart 3, price of Supermx was staying above the T1 line for quite a long time, gaining about RM5.80 or 860%. As indicated by A, price of Supermx broke below the T1 uptrend line, suggesting that the T1 uptrend is no-long valid. Meanwhile, price of Supermx also broke below the 14, 21, 31 EMA, thus the 14, 21, 31 EMA is now serving as the dynamic resistance, and the immediate technical outlook for Supermx is on the negative side.

Technically, as long as the price of Supermx is below the 14, 21, 31 EMA, the outlook shall expected to be bearish biased, despite the price is getting lower. It is important to know the high risk of trying to catch the bottom, or buying too early.

Investors are urge to identify the characteristic of an uptrend, which is higher-low and new high. But if price should stay in a downtrend, its characteristic would be a lower-high and new low. Therefore, a disciplined investors would only buy with the uptrend characteristic, not because of the relatively lower price. Nevertheless, support for Supermx is at RM5.22 while the resistance is at the 14, 21, 31 EMA dynamic resistance as well as the RM6.00 level.

4 Q Rolling PER	9.14 times	Dividend Yield	2%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	11 sen	2.01 %	15.29%
31/12/2008	3.25 sen	4.06 %	5.58%
31/12/2007	1.9 sen	0.63 %	13.85%
31/12/2006	6.5 sen	1.56 %	10.49%
31/12/2005	6.5 sen	1.46 %	12.74%

Table 3: Supermx – 7106, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Even though the broad market is trending up, investors would still have to honor their trading plan for individual counters. When price breaks below an uptrend, a logic thing to do is to take profit or to cut loss, to avoid being caught by the downtrend. Remember, never try to catch the bottom thinking that it is the lowest price.

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 CIMB, Supermx, BJcorp.

As the European and US markets took a sharp quick correction, many local stocks were affected. Could this destroy the existing uptrend?

Case Study Review:CIMB-1023: Consolidating with weakness.

Chart 1: CIMB-1023 (31/12/2009～28/04/2010)

Let's review last week's Case Study of CIMB. As shown on chart 1, price of CIMB has broken below the L1 line of the Ascending Wedge, suggesting that the L1 uptrend line is no long valid. However, as indicated by A, price of CIMB remains supported by the 31-day EMA, thus prolonging its sideways consolidation.

As indicated by the dotted line, there is a risk of a lower-high formation, as this is an early sign of a weakening trend. Therefore, if price of CIMB should break below the 31-day EMA, it would form a downtrend, unless price of CIMB could break above the dotted line with strong volume. Nevertheless, next support for CIMB is at RM13.70 while the resistance is at RM 14.82 WinChart Automatic Fibonacci Retracement.

4 Q Rolling PER	17.93 times	Dividend Yield	1.30%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	18.50 sen	1.46%	26.31%
31/12/2008	25.00 sen	4.27%	25.22%
31/12/2007	25.00 sen	2.27%	31.00%
31/12/2006	15.00 sen	1.94%	23.53%
31/12/2005	15.00 sen	2.63%	17.51%

Table 1: CIMB-1023, yearly dividend, dividend yield, and net profit ratio.

Supermx-7106: Weakening trend

Chart 2: Supermx-7106 (31/12/2009～28/04/2010)

Even since moving in its uptrend in March, 2009, price of Supermx has increased upto RM6.60 or 780%. As shown on the chart, the uptrend has been firmly supported by the 14, 21, 31 EMA, with two exception, that price was temporary below the 14, 21, 31 EMA, but managed to return to above the 14, 21, 31 EMA in short term, (which was the end of September, 2009 and early February, 2010). Therefore, the 14, 21, 31 EMA, is still the long term uptrend dynamic support for Supermx.

As shown on chart 2, price of Supermx retreated as profit taking take place, forming an L1 short term downtrend line, as well as a Lower-high. Technically, this is an early sign of a weakening trend. However, as indicated by A, it has not broken below the 31-day EMA, thus the longer term outlook is still holding up, implying that it might only be consolidating for the moment.

Nevertheless, the current consolidation of Supermx is similar to the effect of a Descending Triangle with the L1 line together with the 31-day EMA. Therefore, if price should rebound and break above the L1 line with strong volume, the 14, 21, 31 EMA would resume its role as a dynamic support, thus the long term uptrend remains intact. On the contrary, if price should break below the 31-day EMA, the L1 downtrend line would remain intact, thus the immediate technical outlook would remain weak. Therefore, it would be a signal to take profit.

4 Q Rolling PER	11.47 times	Dividend Yield	1.59%
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 2:Supermx-7106, yearly dividend, dividend yield, and net profit ratio.

BJCORP-3395: Sign of weakening trend.

Chart 3: BJCORP-3395 (31/12/2009～28/04/2010)

As shown on Chart 3, price of Bjcorp retreated after hitting the RM1.87 level, but it managed to rebound from the 14, 21, 31 EMA, thus it has not formed a downtrend yet. However, after the rebound from the 14, 21, 31 EMA, price failed to break new high, and therefore, it forms a Lower-high, with an L1 short term downtrend line. This suggests that currently, price of Bjcorp is consolidating with bearish biased.

Technically, with price forming a Lower-high, it is an early sigh of a downtrend formation. But since price of Bjcorp is still supported by the 14, 21, 31 EMA, it is now temporary consolidating. And the support is at RM 1.65, which is the similar level of the 31-day EMA, as indicated by A.

If price should remain supported by the 31-day EMA, there is a chance that the consolidation would prolong. However, if price should break below the 31-day EMA, then the L1 downtrend shall remain intact, thus the downtrend will form, with negative technical outlook. If price should break away from the negative biased movement, it has to break above the L1 line with strong volume.

Leading PER	-83.33 Times	Dividend Yield	1.97%
Dividend		Dividend Yield	Net Profit Ratio
30/04/2009	3.35 sen	3.99%	-0.83%
30/04/2008	9.00 sen	8.11%	17.20%
30/04/2007	0 sen	0%	5.72%
30/04/2006	0 sen	0%	-24.33%
30/04/2005	0 sen	0%	-3.03%

Table 3: BJCORP-3395, yearly dividend, dividend yield, and net profit ratio.

Conclusion:

When a stock is having its consolidation and testing its dynamic support, it is the critical moment between resuming its uptrend or a reversal. Therefore, a trader has to be absolutely clear with his trading plan and follow his plan with an undisturbed mind.

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。

LBS, Supermx, SAAG, Scomi.

Ever since the rebound from 1224 level, the KLCI short term movement has been improving, while breaking above the 14, 21, 31 EMA as well as the Bollinger Bands bullish signal. With the KLCI now above the Bollinger Middle Band, the immediate technically outlook is bullish biased, as indicated by A.

Chart 1: KLCI, from 27/10/2009 to 24/02/2010.

Despite technical indicating that the KLCI is gradually gaining strength, total market volume remains below the 40-day VMA level, suggesting that the overall market participation is still relatively low. This implies that the market confidence is also low.

Nevertheless, there are still some counters that are regaining their positions, while others are still trending down. Investors should pick stock carefully, and only select those counters which has a trend similar to the broad market, and avoid stocks that are still trending down.

Stocks going along with the broad market:

LBS

Chart 2: LBS, from 27/10/2009 to 24/02/2010.

As shown on chart 2, price of LBS went into a consolidation last month, but it was supported by the 14, 21, 31 EMA. As indicated by A, as the KLCI pick up some strength, price of LBS rebounded, and remained above the 14, 21, 31 EMA, thus suggesting that it might be resuming its uptrend, and the 14, 21, 31 EMA shall serve as the dynamic support.

If price should remains supported by the 14, 21, 31 EMA, the uptrend shall continue, and immediate resistance is at RM 0.85 level. If price should break above the RM0.85 resistance with strong volume, more upside movement is expected for LBS. If price should break below the 14, 21, 31 EMA, it would be a signal to take profit.

4 Q Rolling PER	13.07 times	Dividend Yield	0.63%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	11 sen	2.01	15.92%
31/12/2008	3.25sen	4.06%	5.58%
31/12/2007	1.90 sen	0.63%	13.85%
31/12/2006	6.50sen	1.56%	10.49%
31/12/2005	6.50 sen	1.46%	12.74%

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

Supermx

Chart 3: Supermx, from 27/10/2009 to 24/02/2010.

As shown on chart 3, price of Supermx resumed its uptrend, and breaking above the T1 mid term downtrend line as the KLCI pickup strength. As indicated by A, the 14, 21, 31 EMA is now serving as the dynamic support, thus the uptrend remains intact.

Immediate resistance for Supermx is at RM 6.18, and some profit taking activities is expected near this level. Nevertheless, it is a good idea to hold on to the stock as long as the 14, 21, 31 EMA is still supporting the uptrend. If price should break below the 14, 21, 31 EMA, it would be a signal to take profit.

4 Q Rolling PER	13.07 times	Dividend Yield	0.63%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2009	11 sen	2.01	15.92%
31/12/2008	3.25sen	4.06%	5.58%
31/12/2007	1.90 sen	0.63%	13.85%
31/12/2006	6.50sen	1.56%	10.49%
31/12/2005	6.50 sen	1.46%	12.74%

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

Stocks going against the broad market:

SAAG

Chart 4: SAAG, from 27/10/2009 to 24/02/2010.

As indicated by A, price of SAAG is still trending down below the falling 14, 21, 31 EMA, and continuously making new low. This proves that the down trend is still intact, despite the strong rebound of the broad market, local and abroad.

Since SAAG is making new low, there is no reliable support sighted at the moment, but the 14, 21, 31 EMA shall remains at the dynamic resistance. In other words, provided that SAAG is still resisted by the falling 14, 21, 31 EMA, the bearish outlook is still intact.

4 Q Rolling PER	36.90 times	Dividend Yield	0%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2008	0 sen	0%	5.63%
31/12/2007	5 sen	0.88%	5.87%
31/12/2006	3sen	1.86%	4.56%
31/12/2005	0 sen	0%	1.47%
31/12/2004	0 sen	0%	-1.35%

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

SCOMI

Chart 5: Scomi, chart from 27/10/2009 to 24/02/2010.

As shown on chart 5, despite the strong KLCI rebound, price of Scomir remains in the downtrend while resisted by the 14, 21, 31 EMA, which is serving as the dynamic resistance. Fortunately, as indicated by A, price of Scomi found at temporary support around RM 0.40, and now consolidating. If price should break above the 14, 21, 31 EMA, with strong volume, it would break away from the downtrend.

But until then, the current reading of Scomi is still weak. If price should break below the RM0.40 level, it would be making new low, thus resuming its downtrend movement after this consolidation. Therefore, it would be a signal to cut loss.

4 Q Rolling PER	4.39 times	Dividend Yield	1.22%
Dividend		Dividend Yield	Net Profit Ratio
31/12/2008	0.5 sen	1.49%	5.53%
31/12/2007	1.25 sen	1.10%	3.58%
31/12/2006	1.5sen	1.49%	5.37%
31/12/2005	1.20sen	1.20%	16.19%
31/12/2004	0.6 sen	0.36%	10.41%

Table 4: Scomi, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
When the market turns bullish, investors have to always confirm the bullishness with volume. If volume should failed to break above the 40-day VMA level, it suggests that the rally was mostly on selective counters, thus picking the right stock would be harder. Therefore, investors should pick stocks that has the similar movement with the broad market, avoid stocks that are still trending down, despite blue chips or KLCI components.

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。