MAA- a HIGH RISK trade explored

Yesterday, MAA recorded a price limit down of 30% to close at RM0.725. A lot has been written about this sell-off. One of the better report is given by Business Times (here). I am going to give my opinion on what's the likely support level for this stock.

From June 2009 to December 2010, MAA was in a gradual downtrend line (RR). On December 17, 2010, MAA broke above that downtrend line at RM0.74-0.75 and rallied until it hit a high of RM1.55 on April 8, 2011. On June 8, MAA attempted to challenge the earlier high but failed. It managed to reach a lower high of RM1.48. On June 20, MAA closed at the low of RM1.03 which was slightly lower than the past 10 weeks low of RM1.04 (recorded on April 5). Yesterday, the stock gapped down on opening & never seriously attempted any recovery.

MAA will probably tested the tentative uptrend line (SS) support at RM0.70. If that support failed, it may test the support from the downtrend line (RR) at RM0.68. Finally, it may test the strong horizontal support at RM0.60-0.62.

For those who wish to try this HIGH RISK trade, you should set your protective stop accordingly. I believe the RM0.60-0.62 level could be a good entry & 3-4 sen below that should be your stop-loss level. Good luck.


Chart: MAA'a daily chart as at June 21, 2011 (Source: Tradesignum)