Tuesday, July 31, 2012
Latexx broke through two resistance levels!
This morning, Latexx broke above its strong horizontal resistance at RM1.60 (see Chart 1). At the close of the morning, it was at RM1.68. If you look at the weekly chart (Chart 2), you will see that its next resistance should be the long-term downtrend line at RM1.75. At 4.30pm, Latexx broke through this downtrend line as well. At the time of writing, it is at RM1.78- a gain of 19 sen!
It is not advisable to jump into this stock after this sharp rally today. A safer approach would be to wait for a pullback to either the downtrend line at RM1.75 or even the gap of RM1.65 (recorded in February 2012). A sudden & sharp rally as witnessed here could be due to a price-sensitive development that is about to be announced. The insiders would have bought into the stock & could be poised to take profit as the crowd surges in.
Chart 1: Latexx's daily chart as at July 30, 2012 (Source: Tradesignum)
Chart 2: Latexx's weekly chart as at July 30, 2012 (Source: Tradesignum)
The latest available financial results is for QE31/3/2012. You can see from below that Latexx's top-line & bottom-line rebounded from its sharp fall. Its financial position as at 31/3/2012 is deemed satisfactory with current ratio & gearing at 1.69 times and 0.34 time respectively.
Table" Latexx's last 8 quarterly results
Chart 3: Latexx's last 15 quarterly results