Tag Archives: candlestick patterns

Stock to Watch: GAB [3255]

The composite index edged higher today with oil and gas counters getting most of the attraction (Perdana, Penergy, Alam, and Dayang). Looking at the current market sentiment, the index is expected to stay strong and will re-test the 1793 resistance level again in days to come.

The focus of today’s discussion would be on GAB [3255], a brewing company which had dipped by more than 20% from it’s highest high in just a month. Investors who kept on adding their position as the share price eased are now worrying that their decision to buy could be a huge mistake. If you fall into this category of people, let me assure you that the share is about to rebound very soon. So don’t fret. As for the others who are looking to take a position… let us look at the chart first.

gab

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)

Genting [3182], GENM [4715]: Trading the Swings

Genting and Genting Malaysia (GENM) are two KLCI constituents that are famous for their volatility. The recent fall in their share prices had created more opportunities for us to profit from the swings. Let’s start our analysis by looking at the price development of GENM’s share.

GENM
It is obvious from the day chart that the share price is heading south. The creation of lower highs over the past few weeks, coupled with the fact that it breached the uptrend line connecting the 4 obvious lows just few days ago, supports the argument that this share is in a downtrend and thus market participants should avoid trading this share. Such an interpretation is technically correct but fail to take into account the big picture. If we look at the price movement of this share over the past two years (see chart below), we will realize that the share price is trading within a wide range (RM3.20 – RM3.93. We do not use RM4.12 as the upper limit of the trading range because the price did not stay above RM3.93 for long. It is better to consider it as a false breakout) and the trading range is narrowing slowly over the years and has been concentrating at around RM3.30 to RM3.77 for close to a year. In the middle of this trading range we have the RM3.52 level which has been tested as supports or resistances (S/R) for close to 10 times. This strong S/R level can be seen as separating the trading range of this company’s share price into 2 smaller trading ranges (RM3.30 – RM3.52, and RM3.52 – RM3.77).

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.

Stocks to Watch: Pwroot [7237], Spsetia [8664]

Pwroot

pwroot
This is pretty straight forward. After a consolidation of 2 months, Pwroot is poised to move again. RM1.27 is the level to watch closely as a break/ close above would send the stocks fly. If you are a fan of Bollinger Band (BB), the first buy signal would have appear on the 18th of February, when the share closed above its middle band. Today, a further buy signal can be seen as it closed above the upper band of the BB. The support is at RM1.22/ RM1.20.

Spsetia

Spsetia

Watch Spsetia closely as well as it is forming a pennant. Using the flagpole as an estimate, the stocks could shoot up by around 40cents and stop at around its previous high of RM3.78 in the event of a break-above. Immediate support is at RM3.39.

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?