Latexx has broken above its downtrend line

Latexx will announce its results for QE31/12/2010 in early February. In line with poorer results recorded by other rubber glove producers, Latex is expected to annonuce a similar decline in its bottom-line. I have appended below Latexx's last 8 quarterly results in the table as well as its last 9 quarterly results in graph.


Table: Latexx's last 8 quarterly results


Chart 1: Latexx's 9 quarterly results

Despite the expectation of poorer results & the generally cautious market sentiment just ahead of the lunar new year break, Latexx has rallied strongly & broke above its downtrend line at RM2.75 today. As at 4.00pm, Latexx was trading at RM2.78- a gain of 20 sen over its closing price yesterday. This rally is unexpected & would definitely bear watching. Is the company about to announce a better than expected results? Or, is it about to announce an exciting corporate exercise?

For those who are nimble, Latexx could be a trading BUY. Its next resistance is at the psychological RM3.00 level & thereafter at the horizontal line at RM3.20.


Chart 2: Latexx's daily chart as at Jan 27, 2011_3.00pm (Source: Quickcharts)

Note: This is strictly a trading call based on technical consideration. I still maintain a bearish view for the rubber glove sector due to the unfavorable supply & demand dynamics; rising latex prices & unfavorable forex movement.