Tenaga has dropped to its recent low of RM6.60 again (see Chart 1 below). If this level is broken, Tenaga's next support will be at RM6.00 (see Chart 2 below). The present political situation & rhetoric would make it very difficult for the Government to agree to any tariff increase for Tenaga in the near future. Thus, Tenaga's profit margin will be squeezed in the light of higher fuel cost. This is quite unfortunate because Tenaga is a private enterprise with profit-making objective. While it needs to consider its social obligation, it cannot be expected to absorb the higher operating cost indefinitely.
In the event of a rebound, Tenaga will encounter resistance from its medium-term downtrend line at RM7.30 & horizontal resistance at RM7.60.
Chart 1: Tenaga's daily chart as at April 29, 2008 (courtesy of Quickcharts)
Chart 2: Tenaga's monthly chart as at April 29, 2008 (courtesy of Quickcharts)
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