Chart 1: GenM's daily chart as at Sept 22, 2010 (Source: Quickcharts)
Another stock which has a more subdue volatility breakout is MMC. On September 2, MMC broke above the RM2.60 level on big volume. The follow-through came today after a short period of consolidation.
Chart 2: MMC's daily chart as at Sept 22, 2010 (Source: Quickcharts)
Volatility breakout happens when a stock which has been consolidating for a long period of more months- even a few years- finally snapped out of the slumber. One may see the consolidation process as a clearing process which culminated in the decisive victory either for the bulls or the bears. Once the bulls or the bears have the upper hand, the rally or the selldown would proceed.
For more on volatility breakout, check out this article by the Trading Edge.
14 comments:
Hi Alex,
Any idea on ARANK. These stock has been bashed down by Lembaga Angkatan tentera. Almost reach year low level!? But based on cumulative 3Q result, its EPS look impressive and its Q4 should be release by next week, which could come together with dividend at least 3.5sen or yield of 7.6%
GenM is playing catching up to the parent company. Market sentiments states it was the unveiling of the 10MP, but seriously it was overhyped and today's adjustment proved just that. your volatility breakout argument is tenable.
Hi Alex,
Genting Group of Companies become market focus recently. How about MPHB? The stock performance is left behind with others gaming counters, what is it trading buy?
Thank you.
Hi kelvin888
I'm quite surprised by the under-performance of MPHB until the recent results announcement by BJToto.
For QE31/7/2010, BJToto's net profit dropped by 21% q-o-q or 36% y-o-y to RM64 million while turnover was relatively unchanged at RM835 million (down 3% q-o-q or 1% y-o-y). Among the reason given for the drop in the bottom-line was the hike in gaming duties. This may also impact MPHB's upcoming results & investors are waiting anxiously on the sideline.
Hi Political Crow's Nest
GenM's belated upside move can be viewed as a poor omen. Or, is it?
The fundamental of the company is solid. The technical outlook is exciting. If one does not bet on this stock, then one would be condemned like the man who ignored a USD10 note on the sidewalk until the next guy picked it up. Aha... that's a genuine USD10 note. Alas, it's too late!
Hi hng,
I agree with your fundamental assessment on ARANK's financial performance. However, this company's financial position is weak, with high gearing position (borrowings to shareholders' funds of 1.1 times) & inadequate liquidity position (with current ratio at 0.9 time) as at 30/4/2010. Nevertheless, the stock broke above its long-term downtrend line at RM0.50 in April & rallied to a high of RM0.64.
That rally seems to have run out of steam & the stock has now slid back & is now resting on the same downtrend line. There are good supports at horizontal lines RM0.44 & RM0.42.
I think the financial position can be easily rectified by capital raising exercise. As the stock is only trading at a PE of 3.8 times, I think it deserves a rating of long-term BUY.
Hi Alex,
From your point of view, what is the next resistance level for GenM?
Thanks.
Dear Alex,
Would like to hear from you about Bpuri (5932)for mid to long term hold. Thanks lot.
Good Day.
Hi Shaun Foo
If the 2007 rally can be a guide, GenM's present rally will be very volatile & would likely to include sharp swings. I think a fair target is about RM3.80-4.00. Its immediate resistance is at RM3.50 and then RM3.80-4.00. A visit to RM4.50 cannot be ruled out.
Hi Alex,
I have a few question to ask.
1. TAGB. What is the fair value on TAGB. It is at 0.405 now, do you think it will up to 0.50?
2. In bursa announcement today on 22 Sept, It said id DOES NOT REQUIRED FINANCIAL ASISTANCE. What this supposed to mean ?
3. ZELAN, this counter seems like very volatile. Does the Coal Power Plant under 10th Malaysia Plan still intact ?
4. Bjcorp, does the Vietnam Lottery confirmed obtained by Bjcorp? What is the fair value of Bjcorp based on your assumption ?
Thanks and appology for too much questions.
Hi Layman
Bpuri has some positive news flow recently which saw the stock moving higher from RM1.10 to RM1.30. Bpuri's long-term chart shows that the stock tends to move in a range between RM0.60 & RM1.50. It has made a high of RM1.54 on July 17. Can it revisit that high again? Can it do better by breaking above the range? Only time will tell.
Hi Alex,
Happy Mid-Autumn festival!!
Genting stock dropped over 4% today. Any reason?
Dear Alex,
Do you have any idea what are the solar energy/ greenery based listed company in Bursa in Main counters? (Ace counter excluded).
Thanks.
market correction as it is Alex. my version was a AUD10 on the pathway. anyway, will go for a USD anytime LoL.
Fundamentally, GenM is very good. I subscribe to your market value at 3.80. so this correction to me again is an opportunity to buy. Been holding it since RM2.62. So i am pleased and somewhat owe you a big meal :)
Post a Comment