Tuesday, July 30, 2013

GENM may have an upside breakout

Recently, GENM has been at the receiving end of some positive news flow after its has announced its plan to spend RM3 billion to refurbish Resort World at Genting Highland. The latest news is the announcement of its tie-up with Twentieth Century Fox to build the world's first Twentieth Century Fox Theme Park to replace the old theme park at Resort World at Genting Highlands at a cost of RM400 million.

The effect of these announcement is that the share price has finally managed to breach the strong resistance at RM4.00. The indicators are still weak, with ADX hardly inching higher. The weak indicators coupled with the poor overall market sentiment would likely put a brake on the potential of this breakout. The last time GENM had an upside breakout of a strong horizontal resistance was in July 2010 where it rose from RM2.70 to RM3.40. Would this present breakout lead to a similar gain in price? Or, would it be capped by the 2007 high of RM4.20? We will have to wait & see.

Based on technical consideration, GENM could be a trading BUY. However, you need to exercise careful discretion given the present weakness in the overall market.

Chart 1: GENM's weekly chart as at July 30, 2013_11.45am (Source: Quickcharts)

Chart 2: GENM's monthly chart as at July 30, 2013_11.45am (Source: Quickcharts)

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GenM.

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