UMcca- watch closely

One of the best performing Plantation stocks over the past 12 months is United Malacca ('UMcca'). The stock made a low of RM4.62 in October 2008 before staging a strong rally to a high of RM8.55 in July this year. It has since corrected back to its accelerated uptrend line (S1S1) support at RM8.00. With the MACD now deep inside the negative territory & the 10-day SMA crossing under the 30-day SMA; UMcca may violate the immediate uptrend line. A break of this uptrend line could send the stock to its medium-term uptrend line (SS) with support at RM6.80-7.00.


Chart 1: UMcca's daily chart as at Sept 18, 2009 (Source: Quickcharts)

From the weekly chart, we can see that UMcca came close to its January 2008 high of RM8.65 recently. The on-going correction has seen the share price beginning to go below the 10-week SMA of RM8.00-8.10. Weekly MACD has also just hooked down.


Chart 2: UMcca's weekly chart as at Sept 18, 2009 (Source: Quickcharts)

Based on the above, you may want to avoid buying UMcca at the immediate uptrend line, S1S1. Instead, if UMcca were to violate this uptrend line, you may want to take profit on this stock. Buying can be considered at the uptrend line, SS. In view of the expected recovery in CPO prices in the next 1 or 2 week(s), UMcca may hold onto the current price level for now.

I have appended below the daily chart for CPO, where we can see the Parabolic SAR (short for 'stop-and-reversal' indicator) has moved below the CPO price (denoted as 'A'). This positive sign could signal the start of the rebound in CPO prices. In addition, we can see that the daily MACD has nearly hooked up (denoted as 'B'). The bullish divergence in the Slow Stochastics (denoted as 'C') was already noted in an earlier post.


Chart 3: CPO's daily chart as at Sept 18, 2009 (source: ifs.marketcenter.com)