Thursday, July 28, 2016

Genting: A Double Whammy!!

Last night, a tour bus crashed down Genting, killing the driver and injuring 15 Chinese tourists (here). This morning, when investors saw the sharp drop in Genting share price, they would think it was an over-reaction. After all, the last 3 bus crashes (in 2010, 2011 & 2012) did not cause a sharp price drop.

What could be the real cause of Genting selldown is the failure of the drug, TauRx to pass the Alzheimer's disease trial (here). Genting has a 21%-stake in the company that owns the drug which was undertaking tests to meet US FDA requirement. If the drug had passed the test, it was reported that it could add more than RM2.00 to Genting share price. With the failure of the recent test, some of the recent price gain will be given back. How much will that be is the big question!

Chart 1: Genting's weekly chart as at July 28, 2016_11.00am (Source: Kenanga BTX/Chartnexus) (Note: Bus crashes in 2010, 2011 & 2013 were noted down in blue vertical lines)

Chart 2: Genting's daily chart as at July 28, 2016_11.00am (Source: Kenanga BTX/Chartnexus) 

Genting's immediate support will come from the horizontal line at RM8.20 and below that the psychological RM8.00 mark (which is very near the intermediate uptrend line, SS).

Based on the proximity of technical support, I feel that Genting is a HOLD for those having the stock. For those seeking to jump in, you can look at the RM8.00-8.20 level.

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, Genting.


Ivan said...

look good to buy at your call price , 8.00 -8.20 ^_^

Alex Lu said...

Hi Ivan,

I agree.