Wednesday, February 29, 2012

Digista- good for a swing trade

In early February, I posted on the upside breakout for Digista (here). It rose to a high of RM0.64 & it has since dropped back to test its horizontal support at RM0.48. This support is also the 3rd fan uptrend line (S-S3) which must not be violated. A break below this 3rd fan trend line could spell the end of Digista's present uptrend.

Digista reported its results for QE31/12/2011 yesterday. Its net profit dropped 11.4% y-o-y to RM3.9 million while its turnover dropped 20.3% to RM22 million. Based on the annualized EPS of 7.0 sen, Digista at RM0.505 is trading at a PE of 7.2 times. For a small-cap stock, that PE is deemed reasonable.

If the stock can stay above the RM0.48 level, it could be a attractive stock for medium-term investment or a swing trade.

Chart: Digista's daily chart as at Feb 29, 2012_12.30pm (Source: Quickcharts)



Dear Alex,

Can you give some cooments on Kretam and Bonia?

Many Thanks.

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Alex Lu said...


Kretam is at its intermediate uptrend line support at RM2.38-2.40 while its resistance is at the horizontal line at RM2.50.

Bonia is forming a saucer or possibly a cup [with the handle yet to be formed]. The breakout level is at RM2.45. Support at RM2.25-2.30.

You can use the current weakness to slowly buy into Bonia. You may want to track Kretam for 2-3 weeks to see which direction the stock is heading. It may break to the downside or to the upside. Then, you would know whether to buy or not to buy.