TChong may have a bullish breakout at RM1.50

In the month of August, the Total Industrial Volume (for the Automotive Industry) increased 5.9% m-o-m or 0.8% y-o-y to 47,585 units sold. This is the third month of monthly uptick, but the year-to-date sale volume is still down 7% when compared to the same period last year.

Most research houses are still neutral on the auto sector because of depressed profit margin due to under-recovery of overhead (because of low sale volume) and high advertising & promotional expenses to attract sale. I believe that some investors have begun to position themselves in this sector. One stock that may have benefited from this is TChong. In fact, TChong may have just broken above its medium-term downtrend line at RM1.50 yesterday. If this breakout can sustain, TChong may test its strong resistance levels, such RM1.80 & RM2.15.


Chart 1: TChong's weekly chart as at October 2 (courtesy of Quickcharts)


Chart 2: TChong's monthly chart as at October 2 (courtesy of Quickcharts)