Advertisement

Thursday, January 30, 2014

MNCs- time to take some profit?

You will see below a few charts for blue chip MNC stocks that had done very well in the past few years. The charts are ranged according to their technical outlook; from bullish to bearish. These are my observations:
1. The first 3 charts (DKSH, Nestle & Carlsbg) don't tell us much. They are still in an uptrend.
2. The 3rd chart (Carlsbg) shows a stock that is still in an uptrend line but it had declined quite a lot from the recent high. Notice how the drop accelerated after it broke the 50-w EMA line.
3. The same thing happened to GAB after it broke the 50-w EMA line. GAB has broken below its uptrend line.
4. The following 2 charts (JTinter & Harison) broke the 50-w EMA line and dropped sharply before recovering.
5. Dlady (the next chart) did not break the 50-w EMA line and enters into a mild consolidation phase.
6. The last 2 charts (PPB & Shell) shows that not all breakdown would be followed by swift recovery.
So, watch out for the breaking of the 50-w EMA line. However, since the market has gone up so much in the past few years, a better approach would be to take some profit. Why give away your profit by waiting for a drop that would trigger a sell?!


Chart 1: DKSH's weekly chart as at Jan 29, 2014 (Source: Tradesignum)


Chart 2: Nestle's weekly chart as at Jan 29, 2014 (Source: Tradesignum)


Chart 3: Carlsbg's weekly chart as at Jan 29, 2014 (Source: Tradesignum)



Chart 4: GAB's weekly chart as at Jan 29, 2014 (Source: Tradesignum)





Chart 5: JTinter's weekly chart as at Jan 29, 2014 (Source: Tradesignum)


Chart 6: Harison's weekly chart as at Jan 29, 2014 (Source: Tradesignum)


Chart 6: DLady's weekly chart as at Jan 29, 2014 (Source: Tradesignum)


Chart 7: PPB's weekly chart as at Jan 29, 2014 (Source: Tradesignum)


Chart 8: Shell's weekly chart as at Jan 29, 2014 (Source: Tradesignum)

Note: 
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, DKSH, Nestle, Carlsbg, GAB, JTinter, Harison, PPB & Shell.

3 comments:

Big Sea said...

Alex,

Happy Chinese New Year.
Apart from these companies, another one that look similar is AEON CO.

Fundamentally I believe everyone is expecting domestic consumption to be weaken significantly.

I believe all these spells a bleak outlook for stocks like Scientex, BOX PAK, Johor Tin.

Alex Lu said...

Hi Big Sea

My take on:
1) Scientex is still in an uptrend & it is currently consolidating in an ascending triangle with support at RM4.90-5.00 & resistance at RM5.80.

2) BOX PAK is still in an uptrend & it is currently consolidating in a symmetrical triangle with support at RM2.15 & resistance at RM2.45.

3) Johor Tin is still in an uptrend & it is currently consolidating in a descending triangle with support at RM1.60 & resistance at RM1.65.

If these stocks break their support, their uptrend could reverse into a downtrend.

Big Sea said...

Alex,

Thanks for your advise.
I believe fundamentals would eventually catch up for BOX PAK, Johor Tin and Scientex. I speculate that all would break their support and reverse into a downtrend.

I am still holding on to Scientex because Scientex is more aggressive with M&A. A bad market would provide good opportunity for M&A at a cheaper price.