Tag Archives: Downtrend play

Stock to Watch: Zhulian [5131]

Given the strong track record of the company, coupled with its high dividend yield, Zhulian will definitely attract the attention of both the fundamentalists and technical analysts as it slides further. We need to be quick in determining the level of which the risk-reward ratio is low enough for us to take a comfortable position before it stages a rebound. To determine this level, we need to look at its supports and resistances (S/R).

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: AeonCr [5139]

After appreciating by a staggering 400+% in less than 2 years to an all-time-high of RM13.72, funds that are involved began to take profit. While the long-term uptrend was only violated in early January, sign of long-term reversal was revealed earlier in December when it formed a lower high.

As a contrarian, I would not shun this counter just because it is on a downtrend. In fact, downtrend stocks are sometimes good to trade because they provide not just the margin of safety but also more information on all possible explicit and implicit support/ resistance. Greater insight on a fund’s intention could be obtained as well by studying the price and volume on each minor waves that form the major trends.

Let’s look at the reasons why I think Aeoncr is an attractive buy at the moment.