Yesterday, it went to an intra-day high of RM6.15 but closed at RM6.09- just shy off the upside breakout level of RM6.10. This morning, Kseng again went above the RM6.10 breakout level- going as high as RM6.14 before pulling back to the present price of RM6.09 (as at 10.40am). KSeng's yesterday move was on big volume but the volume has dwindled substantially.
Chart 1: KSeng's weekly chart as at Oct 26, 2010 (Source: Quickcharts)
If KSeng can break above the RM6.10 level, it could rally significantly in a technical 'blue sky' scenario (see Chart 2). KSeng's share price could potentially go as high as RM10.00-20.00. This target is arrived at by adding the trading range (A) to the breakout point (RM6.10). If we based on a logarithmic chart, the target price could be about RM15.00-20.00 (such as the one below). If we used a linear chart, the target price is about RM9.70-10.00.
Chart 2: KSeng's monthly chart as at Oct 1, 2010 (Source: Tradesignum)
This is an anticipatory trading BUY call. KSEng has yet to surpass the upside breakout level of RM6.10 convincingly. As such, the stock is not a trading BUY yet.
26 comments:
Hi Alex, PJD just announce entitlement of its new warrant, share price has move surpass 85sen to day high 86.5sen. But currently still hanging around 85sen, seem like it need more momentum to convincingly overcome these resistance level. If so, i think the breakout could be successfully and to test next level. What do you think?
hi alex,
eurosp announced speciald dividend of 0.40. at current price, it's >20% return. do you think this is a good trade? however, i notice its financials are not solid, yet it is able to give such high dividend.
btw, what is happening to MTD Cap, it's been a straight up. it can't be just the Luzon highway news, can it?
thanks
maxwealth88
Ammb also a breakout? What's the upside like for this counter?
Hello Alex, on kseng...beside the potential of the share price going higher, am waiting for their potential high dividend announcement. Reason is that they make huge gain on the sales of Parkway Holding.
Hi Alex,
What do u think about LIONIND , LINDIV and LIONFIB, these stock are breaking its 240 Day high, and the EPS is quite high, do u think it's a good trade for midium term.
If i were to choose among the three, can i take the EPS as a reference guide to choose for the worth buying ?
Thanks and hope to hear from you.
Hi Alex,
What do you think of Petronas's Petrochemical IPO.
I have been given the pink form for 50,000 shares.
From what i know is that the profits can be very volatile due to the volatile prices of oil.
If we were to compare it with PETGAS, i do believe there won't be much upside in the short-mid term
Would like to hear your point of view on it.
Closing date for this IPO is on the Nov 1st.
Cheers.
I had bought kseng since 20 yrs ago on n off but sadly nothing fruitful until now. The problem lies with the mgt where more than 70 % were controlled by the major shareholders. The mgt is very stingy to give out any dividend or bonus shares but instead keeping for themselves. We need buyers outside to aggressively wage control this company at the prevailing market price so as to realise its true potential. Other than that , it is fat hope of this stock to perform .
So far the dividend given out by kseng is reasonable...2008 eps=26.31 and div=12.50, 2009 eps=42.02 div=10 and for 2010 eps so far=11.10 and div=6. Only 2009 is not so good...this could be due to uncertainty in the market and also management prefer to take the cash and invest in those rock bottom company. Let's see what they want to do in this coming qtr results.
Hi Alex,
Could you take a look at Wellcall? Consistantly profitable company with good dividends. Share price has been plunging recently with directors selling also. Perhaps the rising rubber costs is hurting it, as a rubber hose maker? Do you feel this is a good time to accumulate, or too risky to catch the falling knife? Thanks!
Hi Hng,
I agree with your assessment on PJDev. The stock has broken above its downtrend line at RM0.78-0.80 in early October. It may have broken above its horizontal resistance at RM0.85. Its next resistance level is around RM0.90 (+/- RM0.02) and then at RM1.00.
Hi MaxWealth88
You can forget about Eurosp. Besides the huge Special Dividend of RM0.40, the company is not a profitable company (go here & here ). Since the announcement of the Special Dividend, the stock has risen about RM0.30. What can we look forward to after this dividend? Not very much...
I think MTD's recent spectacular rise is due mainly to the favorable judgment regarding its Luzon highway concession. Of course, one cannot rule out other developments but who knows what these developments could be.
Hi JY
Ammb broke above its 2-month old ascending triangle at RM6.00 on Tuesday. In August, Ammb broke above the rising line connecting the peaks which capped this stock since 2000 (at the breakout level of RM5.50). Ammb could potentially test its all-time high at RM6.70 recorded in early 1997.
Hi Digital
Thanks for sharing.
Hi ayseng
I know how it's like to get into the latest hot stocks & to be caught out when the music stopped. I must admit that KSeng could fit the billing very well.
I think we have to exercise risk management whenever we enter into a stock that has broken above its all-time high. While it can be a good trading proposition, it also entails a lot of risk.
I remember the first time I bought Keck Seng shares was in 1984. The company used to declare bonus issue once every 4 to 5 years until 1995. Since then no bonus issue has been declared. Hopefully, with so much profit from the sale of Parkway and the huge capital reserve should the assets be revalued, a bonus issue of 2 for 1 is even possible. When you invest in Keck Seng, you just have to be patient.
Hi AlexP
I agree with your assessment on Wellcall. It is a profitable company with good dividends. Its financial position as at 30/6/2010 is very healthy, with current ratio at 8 times & no borrowings. In fact, it has FD & Cash balances totaling RM38 mil.
Wellcal broke its medium-term uptrend line at RM1.25 as well as its horizontal line at RM1.19-1.20. The poor technical outlook is not something we can take lightly. Based on the bearish technical outlook & significant directors' selling, we should avoid the stock for now.
Hi Prudent Investor
Thanks for sharing.
Hi ppfoo
That's a tough one. I'm going to cut it down to size. Firstly, I don't quite like LionFib despite my earlier post ( here ). The company's bottom-line is too dependent on exceptional gains from rescheduling of bonds & debts in Silverstone & sale of investment in China. If these items are excluded, Lionfib's botton-line has been sliding for the past 2 quarters. The only excitement in LionFib is the sale of Silverstone which would lead to a one-off exceptional gain.
LionInd & LionDiv are both trading at PE of about 4 times. Their dividend yield are very poor due to their high borrowings. As at 30/6/2010, LionInd's financial position was better than LionDiv. LionInd has lower gearing at 0.29 time & higher current ratio at 1.56 times, while LionDiv's gearing ratio stood at 0.43 time while current ratio dropped to 0.89 time. The latter was attributable to large long-term borrowings maturing within the next one year.
Based on the foregoing, LionInd is preferred to LionDiv. However, LionDiv would continue to enjoy buying support as it's a cheap stock.
Hi jeremy tan
The prospectus for Petronas Chemical is not out yet. I will look at it when it has been uploaded onto Bursa website.
Agreed with Prudent Investor. Patient is the name of the game for kseng. Genm use to be like that too....rm5bil in cash and investor/trader call for more dividend or better use of their cash. Let's all wait and see what kseng want to do their cash.
Hi Alex,
Thanks for the sharing and explanation. Really appreciate it.
Thanks,
ppfoo
Hi Alex :
After the announcement that Kseng is going to give bonus issue 1 for 2 held since 1995 , this stock only moves from 6.00 to 6.50 . It then retreating to around 6.30 . Does it means that Kseng has stabilised even it has potential to a height not a single stock can surpassed considering its big land bank in JB area which has not been revalued since 1965 or earlier. Previously per acre is < RM 500 but now is > RM 200,000. It has been appreciating more than 40 times . Assuming its share is RM 1 by right it should be RM 40 now. Sadly many small investors are selling this stock because trading is limited to small vol . Sellers more than buyers? Many analysts had dropped their spectacles because all technical analysis never proved right .So what is your comment on this sickening stock?
Hi Alex:
Kseng moves up today after a long rest since 1995 . Armed with the accumulated reserves , profit from sales of parkway , strong fundamentals n TA . Together with the offering of bonus shares 1 for 2 . This stock suddenly see the light at the end of tunnel. The extraporation to hit RM7-RM 10 will be easily met . Higher than RM 20 will be extra bonus. Thanks for your detailed analysis.
After the announcement of Kseng giving out special dividend and bonus , this stock failed to stir up buying spree as the nos of small investors are small compared with the majority shareholders which controlled around 70 % of the total shares . The actual float is much less than 30% . So if the majority shareholders were to hold the shares and suppressed its price , most small investors with weak holding powers will let go the shares as the time to realise profit is too long to wait...
Hi leslieroycarter
Your statement that "the majority shareholders... suppressed its price" is not quite correct. You only act to suppress the share price if you want to buy more of the shares (such as a privatization plan). If that's the reason, why then did the company announce a Bonus Issue? The latter would cause the share price to go higher & the privatization plan (if ever there was such a plan) would be more costly. For Kseng, I don't think there is any privatization plan nor any action to suppress the share price. The subdued reaction of the market may be attributable to the fact that the stock had had a rather strong rally & the buyers are not ready to bid the price much higher than presently traded.
Hi Alex,
After read the analysis for keck seng is not yet good trading buy. I have abit scaring am i pick for correct counter invest. Becoz, as i knew that my father's friend has long time invest this counter from yrs 1993 start to keep until now. Price from RM1++~RM4++. Today, price for keck seng stay on 6.78....will it continue to move forward to NTA 7.49 before bonus X date? What is your comment to hold it after bonus issue or sell direct in X date. I may thanks for you advice. pls comment anything i 'm wrongly say ...
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