Stock to Watch: Aeoncr [5139]

Despite the local index edging up slightly, the overall sentiment of our market continues to be weak today, with the ratio of losers to gainers stands at a high of 2.18. The uncertainty of the result of the coming election is inducing most of the market participants to “sell on strength”, causing most shares that have rose dramatically in the past few months – property stocks especially (e.g. Tebrau, KSL, UEMLand) – to begin reversing, thereby forming the “wave a” of Elliot Wave (The first leg of the downtrend that follows the 3-waves uptrend). Property play is not over yet but at the moment, with the current weak market sentiment, it is definitely not safe to enter into a position. We will take a brief look on Aeoncr [5139] instead, which is also beginning to reverse from its 3-months uptrend.


After the posting on Aeoncr in late January, where a bullish signal was seen, share price of Aeoncr climbed steadily by close to 50% to its recent all-time high of RM15.30 in just 3 months. While the uptrend is still intact, the formation of the same low (instead of a higher low) at RM14.20 (close to the Fibonacci 23.6% level) indicates that the uptrend is ending. At this point, we would expect the share price to either consolidate (move sideway) or to retrace to lower levels in the coming months. Both the horizontal support of RM14.20 and the uptrend line are to be watched closely as a breach would indicate that a downtrend is more likely than a consolidation. Given the current bad sentiment, the possibility of the share price breaching its supports is at the high side. Moving on, it would be wise to accumulate this share once it moves to lower price levels, possibly at all the round number supports (RM13/RM12.50/RM12), since the company is performing extremely well (you may view its recent quarter’s performance here). Aggressive traders may even try to trade the downtrend swings by buying into the possible resistance-turned-support of RM13.58, though it is not advisable in the current market condition.

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