Tag Archives: bullish reversal pattern

Stock to Watch: MHB [5186]

Before we perform a thorough analysis on the price development of MHB [5186], lets take a brief look on the general market movement. As can be seen from the chart below, the index is still moving within the sideway channel (or in a rectangle). Market was weak in the morning, dragged by the poor performance of the regional market, but began to recover in the afternoon session and managed to close just below its opening, thereby forming a doji. With buyers coming in everytime the market touches the 1766 support level, it is hard to tell at this point whether the bull or the bear will triumph in the coming weeks. We need to watch the upper and lower boundaries of the sideway channel closely.

klci (4) (1)

Stocks to Watch: Padini [7052], Sendai [5205]

As requested by some of the readers, we shall discuss on Padini and Sendai today. Let’s begin our analysis with Padini [7052].

padini (1)
Ever since the uptrend was projected in late February, share price of Padini has been moving up gradually. Just recently, it hit a short-term high of RM2.10 on the 9th of April before falling for 4 consecutive days, partly due to poor market sentiment. The share price was dragged below its upward channel to its horizontal support of RM1.86 yesterday and after trading at a tight range, price managed to close higher at RM1.88 today. The signal for potential reversal and limited downside risk at the current price level means that long-term investors/ traders should start accumulating this share now. While the upward channel is no longer valid, the uptrend remains intact as long as the crucial RM1.86/RM1.85 support is not breached.

Stocks to Watch: CCM [2879], Tebrau [1589]

The market is extremely bullish today. The index rose by a staggering 17.39 points, with gainers outnumbered the losers by 298 shares. Some of the shares had managed to create new highs (UOADev, Tenaga, Pwroot) and are definitely worth the look as they may continue their rise tomorrow. But let’s not discuss about these shares because despite their possibility of continuing their upward movement tomorrow, the risk-reward ratio will rise slowly as price increases, making any trades in these shares to be increasingly dangerous. We are more interested in finding out shares that have yet to join the hype and are preparing to surge. We shall begin our analysis with CCM [2879].

CCM

PPB [4065]: The Forgotten Giant

The share price of this KLCI constituent was hammered since last year due to the expected short-term poor performance of its 18.3%-owned associate, Wilmar, which contributes more than 50% of PPB’s earnings. After moving slightly lower than its book value in the end of December 2012, interests in this share started to kick-in and price began to move upward with high volume.

ppb2

Update on Zhulian [5131]

I mentioned in my previous post on Zhulian that its price is expected to rebound once it reaches the RM2.53 level. Given the improved sentiment today, the price may not reach the RM2.53 level but instead rebound tomorrow since RM2.60 is itself a support level. The formation of a dragonfly doji with high volume and the creation of 8 new lows as counted from the 21st of January provide further signal of a possible reversal.

KLCI: An Up Thursday Maybe?

KLCI

While the short-term trend is still bearish, as indicated by the downward slopping trendline that connects all recent highs, KLCI may rebound slightly tomorrow and the day after. This prediction is not without a basis since a hammer with high volume is formed and risk-taking activities can be seen in a number of shares (I shall share some of the shares with bullish signal in another post). From a market anomalies perspective, Wednesday has proven to be a day with high possibility of reversal, especially if the direction of the price movement are the same from Monday to Wednesday. A green bar is not impossible since 20th of February is also one of the reversal dates according to Gann’s wheel.

Despite the bullishness in the immediate term, we have to be wary of the announcement of the dissolution of parliament as it could potentially send our market down towards the 15xx region. The continuation of the downtrend of our major telcos (Axiata, Maxis, Digi) could also offset any gains in other KLCI constituents, thereby dragging the CI down as they are among the top 7 companies by index sensitivity.

To conclude, its a 2-days GO for day-trader but a WAIT for others. If you are planning to take a position, make sure you keep your stop loss tight.

Airasia [5099]: Looking Into The Shareholdings of Institutional Funds

In my previous post, I explained why I was expecting Airasia’s share price to drop to the RM2.50 or RM2.30/ RM2.20 level before rebounding. The development of the price movement in the past 2 weeks, however, had caused the formation of an inverse-head-and-shoulder increasingly likely. The small reversal on the 8th of February with increased volume could be a signal for trend change. The support level at RM2.63 seems plausible since it was the lowest level being traded when the market tumbled in 2011 (as highlighted in the chart).

airasia general

But is it a confirmed trend change, or could it be just a bear rally? To answer this question, we need to look deeper into the activities of both the institutional funds that are involved in this counter.

Stock to Watch: Airasia [5099]

AffinInvestment Bank has been giving a buy call on Airasia with a price target of RM3.70 (an upside of 37% from yesterday’s closing) ever since its share price was hammered from its July top due to (1) possible increase in competition from Malindo Airways, a joint venture between Malaysia’s National Aerospace and Defence Industry and Indonesia’s Lion Air which is expected to start operating in May this year, and (2) adjustment of funds as Airasia seize to become one of our index constituents. In fact, most, if not all, of the research houses have price targets that are higher than yesterday’s closing price. So given the bullishness on Airasia – which comes mainly from an increase in its number of passengers carried and its growth capacity which translates to higher revenue - and its current favorable price, should we buy now?