Century has broken above its downtrend line

Century Logistic's financial performance may be bottoming out in QE31/3/2009. From the Table below, we can see that the company made a pre-tax profit of about RM1.0-1.3 million in past 2 quarters (QE31/3/2009 & QE31/12/2008).


Table: Century Logistic's 8 quarterly results

While its top-line has been quite erratic in the past 6 quarters, its bottom-line shows a clear sign of having peaked in QE31/3/2008 & thereafter it has been sliding lower. Up to QE31/3/2009, there is still no sign of recovery. However, given the recovery in the global trade, I believe that Century Logistic is likely to post an improved performance in QE30/6/2009.


Chart 1: Century Logistic's last 12 quarterly results

From the chart below, we can see that investors are prepared to bet on a recovery in Century Logistic. The stock broke above its medium-term downtrend line at RM1.15 on July 15. It has also broken above the horizontal line resistance at RM1.20 on July 20. The stock gained 11 sen to close at RM1.39 this morning. Its next resistance is at RM1.60.


Chart 2: Century Logistic's weekly chart as at July 21, 2009_10.30am (Source: Quickchart)

Century Logistic could be a good trading BUY, with the ideal entry price at RM1.20. In this environment, we cannot expect to see that price anytime soon. So, you may have to raise the entry level to RM1.30.