Maybank on the path for long-term recovery?

As noted yesterday, Maybank has broken above the ascending triangle which signaled the potential for bullish price movement for the stock. I like to point out that this breakout could also signify a reversal of the downtrend that began in January 2008. With this reversal, the stock could begin its long recovery. How do I come to this conclusion?

If you look at the chart below, you will see three triangles (in blue) where the share price was congested for some time. In technical analysis, these triangles would resolve themselves into either a continuation pattern or a reversal pattern. There is a third possibility- where the price would exit through the apex- where we would say that the triangle was unresolved. The first two triangles resulted in a breakout in the same direction as the preceding downtrend and are called continuation pattern. The final triangle resulted in a breakout in the opposite direction to the preceding downtrend and is called a reversal pattern. The only setback is that the breakout was not accompanied by huge volume.

Based on the above, I believe Maybank could be a good long-term BUY. The ideal entry level is at RM4.20.


Chart: Maybank's daily chart as at 15/4/2009 (Source: Tradesignum.com)

I like to remind all Maybank shareholder that the closing date for the Rights Issue is on April 21st (next Tuesday). I have received numerous telephone calls from clients informing me that they have yet to receive their Provisionally Allotment Letter. A few have only received theirs yesterday or the day before. Some were not even aware of the Rights Issue. You may go here to print out the standard Provisionally Allotment Letter. I have informed Maybank (Ms. Edlene of Corporate Services) & Bursa (Mr. Khoo of Listing Department) of this problem. I hope that they can look into this delay.