Thursday, April 19, 2012

UEMLand & MRCB signal further weakness ahead

Today has not been a good day. Two out of the three stocks which retailers linked to UMNO/BN broke their strong horizontal support. They are UEMLand & MRCB. The remaining stock still standing is Timecom. This is very telling of the weakness in our market.

Chart 1: UEMland's daily chart as at April 19, 2012 (Source: Quickcharts)

Chart 2: MRCB's daily chart as at April 19, 2012 (Source: Quickcharts)

Chart 3: Timecom's daily chart as at April 19, 2012 (Source: Quickcharts)

I expect to market to continue to drift lower.


luminaire10 said...

Hi Alex,

It is worth to accumulate MRCB and UEMLand this time?


Kevin Soon said...

Hi Alex,

Would an MBA be useful to help me make better investment / trading decisions in the stock market?

Kevin Soon

Alex Lu said...

Hi Kevin Soon

For better investment & trading, you can study for CFA as well as reading up on technical analysis & trading techniques. CFA is a tough course and you would only do it if you are thinking of pursuing a career in this industry. Otherwise, you can just read up some books on fundamental analysis.

A good place to start is the website called Investopedia.

Alex Lu said...

Hi luminaire10

You may accumulate MRCB and UEMLand slowly at RM1.65 & RM2.05, respectively. If these stocks were to break below these levels, they may hit RM1.50-1.60 (for MRCB) & RM1.80-1.90 (for UEMLand).

luminaire10 said...

Thanks for your opinions, Alex.

Mat Cendana said...

Have just discovered this very informative blog - great job!

Too late to follow the advice of accumulating MRCB at 1.65 - I had already bought some at 1.72 today:-)

Despite what the technical charts may seem to say, I feel it has gone down quite a bit already although there's always the possibility it might go down even more, of course. But I'm hedging my bet in not going all out - keeping most of the gunpowder dry in the event it slips below 1.65.

I'm banking on there being some positive announcements in the next few weeks. The EDL especially - I think the government has to be fair to MRCB and decide on this real soon... including compensating it for the toll matter. And if it wants to be popular by keeping it toll free, then the government will have to buy the EDL.

There's also the RRI land at Sg. Buloh. It's not known yet who will get what and how much but there's a strong possibility MRCB should get *something*.

Buying MRCB and other counters which are felt to be "Umno/BN-connected" is also a bet that Umno and BN will do better than they did in 2008. Regardless of one's political inclinations, it's better to look after one's self first and try to benefit from these events. To my thinking at least, Umno and BN will do better in the next GE than in 2008. Hopefully, I'll also get to benefit from this instead of just being a spectator. That's why I'm accumulating MRCB and similar counters.

derrtan said...

I'm holding quite a lot of UOA share, if MRCB happen to drop till the same value as UOA, if it a good idea to shift my investment to MRCB instead?


Alex Lu said...

Mat Cendana

A well-thought argument for buying or holding onto MRCB. The stock should have strong support at RM1.50-1.60. As such, the downside is fairly limited.

One thing we must be careful of is selling a stock & failing to buyback before the next upleg (whether near the low or after a bullish breakout). If we choose to sell when the downside is limited, that risk can easily come back to haunt us.

Alex Lu said...

Hi derrtan

Switching from UOADEV to MRCB- say at RM1.60- can be a good diversification move, especially when you have a fair bit of UOADEV. MRCB is well-backed by EPF and it has a number of interesting projects in the pipeline.

Mat Cendana said...

You are so right about MRCB (and probably UEMLand too - I don't follow it too closely). If I had known about this blog previously, I would have made a better buy. As it was, I was a bit too early; buying at 1.72.

Yes, it had gone past that for a fleeting moment but the profit was too small to sell. In fact, that's the trend with it over the past few weeks - traders would sell after just a few sen gain. This, of course, pulled the price back down.

But MRCB's time will come (soon, I hope). Just one piece of good news - about the EDL, for instance - will likely ignite the spark for an upswing.

By the way, can you also include the option to subscribe to your posts by email? I think there's this feature in Blogspot that will allow us to receive an alert whenever you write a new post. Thanks in advance.

Alex Lu said...

Hi Mat Cendana,

I agree with your positive outlook for MRCB. Its link to EPF & its potential acquisition of the Sg. Buloh MRI land will be positive for the stock. However, one does wonder why is this stock making small profit all this while. They have a nice piece of land in KL Sentral & it did not change its fortune much. Would the Sg. Buloh land do the trick?

On the email feature, I will look into it. Thanks for bring it up.

Mat Cendana said...

MRCB has been moving up. Solid finish last Friday and doing so far today. However, profit-taking is putting a check on further upward movement.

Might last Friday's volume and rise be connected to an impending announcement and that some insiders are trading ahead? About the EDL or Sg. Buloh perhaps? Whatever, it's about time MRCB moves up again. It's been in the doldrums for weeks.

Alex Lu said...

Hi Mat Cendana

MRCB broke above its downtrend line at RM1.55 about 1 week ago. Today, it broke the horizontal resistance at RM1.65 & it is now pressing against the RM1.75 resistance.

An upside breakout of the downtrend line means that the outlook for the stock has turned positive. If the stock weakens back to RM1.65-1.70, I think it is a buy.