Petra has surpassed its recent high of RM0.99 recorded on December 14. As at 4.20pm, Petra was trading at RM1.09. The market action for this stock is strong and the volume is heavy.
Chart 1: Petra's daily chart as at Dec 21, 2010_ 4.00pm (Source: Quickcharts)
In addition, we can see that Petra has also broken above its long-term downtrend line at RM0.80-85 in early December. The technical indicators have turned up.
Chart 2: Petra's weekly chart as at Dec 21, 2010_ 4.00pm (Source: Quickcharts)
Based on the technical outlook, Petra could be a good stock for trading purposes or even medium-term investment. However, it must be noted that Petra's recent financial performance has been disappointing, with huge losses recorded in the past 2 quarters (here a& here). For QE30/9/2010 & QE30/6/2010, Petra chalked up net losses of RM24 million & RM33 million, respectively.
10 comments:
hi alex,
do you support MNRB on the takaful ikhlas stakes selling?
Hi Alex,
Care to share your view on Frontkn?
It has been trading sideways for the past few months. The trend is slowly siding up as seen from the chart, however the accumulation has stopped lately with distribution going on.
Hi, good analysis...
Can you give some sharing or thoughts on FPI? The stock PER is cheap less than 6x, historical dividend yield > 10%, just wonder why it remained stagnant around RM0.85 to RM0.90.
The RSI does not seem to stay above the 70 level - see April - and is currently just above it. What does it mean?
Hi ryan
It is too preliminary to make any comment. MNRB may be discussing with Allianz about selling some of its 100%-stake in Takaful Ikhlas. It may be a small stake or it may not go through. Let's wait for the news.
Hi DidiNGerGer
I am not familiar with Frontkn. It is in a medium-term uptrend with support at RM0.17. This stock has been dropping since making a high of RM0.61-0.62 in 2006. It broke above the long-term downtrend line at RM0.17 in September this year. There is some mildly negative news about a possible assets restructuring in the company, as reported by the Edge. The company has since pooh-poohed the report. Go here .
The financial position seems alright as at 30/9/2010. Current ratio at 1.8 times and debts to equity at 0.4 time. Its financial performance is unexciting, recording a EPS of 1 sen for 9-month ended 30/9/2010. As such, Frontken is trading at a rich PE of 13 times.
Hi Wall Street KLCI
FPI does look cheap with PER at less than 6 times (actually 5.1 times). The stock tested its uptrend line support at RM0.82 recently. This uptrend line actually started in early 2008.
The last time FPI had a strong rally was from early 1998 to early 2000. Thereafter the stock broke its uptrend line & entered into a 8-year downtrend that culminated in the current rally.
Notwithstanding the attractive valuation, you must keep an eye on the share price. If the stock stay above the RM0.82 level, then everything will be fine. If it breaks below the RM0.82, FPI's technical outlook would turn bearish & it may enter into another prolonged downtrend. Bear in mind that the normal rule is that a stock in an uptrend (such as FPI presently) will remain in an uptrend. In which case, the appropriate strategy is to buy when it drops to the uptrend line. However you must note 2 things: firstly, FPI has been in an uptrend for about 3 years & secondly, some indicators have turned negative, which may signal a potential breakdown of the uptrend line.
I know the above information sound illogical & contradictory. This is one of the cases where the technical picture is a bit mixed while the fundamental picture is still positive. When the market throws you a curved ball, you either duck or you try your best to hit it.
Good luck!
Hi blue98
The RSI is a good indicator to watch when the stock is in a sideway or no trend. Once a stock has entered into an uptrend or a downtrend, the more appropriate indicator is the MACD. Nevertheless, you may note that if RSI can stay above 70-75 when the stock is an uptrend, that stock is in a strong trending mode. Similarly, if RSI can stay below 25-30 when the stock is an downtrend, that stock is in a strong trending mode.You must use the indicators (such as RSI & MACD) together with Moving Average Lines & Trandlines to get a more reliable reading of the stock.
Alex,
Thanks for the explanation.
Season's Greeting to You.
Thanks Alex for your sharing on FPI.
For me, FPI fundamentally looks good, but somehow investors do not notice it (based on the relatively low volume).
I guess the strategy is to wait until the market noticed it.
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