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Tuesday, July 19, 2016

KESM: At the January High Aagin!

On mid-June, I posted on KESM where I maintain my rating for the stock as a SELL ON STRENGTH based on anticipated normalization of earnings. For more, go here.

The stock has rallied in the past 4 weeks from RM4.10 to RM5.95 yesterday. This is the high recorded in January this year. In line with my recommendation, you may consider taking profit progressively on this stock from here now. 


Chart 1: KESM's weekly chart as at Jun 18, 2016 (Source: ShareInvestor.com)

There is a good possibility that the share price may charge thru the RM5.95-6.00 level. from the daily chart, we can see that the MACD has crossed above the MACD signal line. In the past, this positive technical sign had shown up after a big push and the momentum could well carry the stock for another 3-5% higher before correction set in. 


Chart 2: KESM's daily chart as at Jun 18, 2016 (Source: ShareInvestor.com)

Of course the big question is where is the Peak, not the temporary peak! From the monthly chart, we can see that the last Peak was a sharp spike-up to RM6.30. If we can hit this mark again, it would have been a great investment- making a tidy profit of 250% since September 2013!


Chart 3: KESM's monthly chart as at Jun 18, 2016 (Source: ShareInvestor.com)

Conclusion

Based on anticipated poorer financial performance, I would maintain my rating for KESM as a SELL ON STRENGTH.

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, KESM.

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