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Wednesday, June 14, 2017

Genm: Intermediate Uptrend Has Ended


In late May, GenM broke its intermediate uptrend line, SS (at RM5.85) which dates back to January this year. The breakdown of the uptrend line means that the continued uptrend for GenM has ended and the next phrase of price movement will be either a sideways movement or a downtrend (or a combination of both). GenM has in fact been moving sideways between RM5.60 & RM5.80 for the past 9-10 days.

Chart 1: GenM's daily chart as at Jun 13, 2017 (Source: Shareinvestor.com)

If you look at GenM’s monthly chart, you will see that it has been rising in an upward channel since 1998. During this 18-year period, GenM has touched the upper line thrice and the lower line thrice. Whenever these happened, the share price would move back into the middle of the channel. In May, GenM touched the upper line at RM6.40. Based on previous experience, GenM is likely to move towards the middle of the upward channel.

Chart 2: GenM's monthly chart as at Jun 13, 2017 (Source: Shareinvestor.com) 

I believe that investors should sell or reduce their position in GenM based on the following
1) the breakdown of the intermediate uptrend line at RM5.85; thus ending the immediate prospects of higher prices, and
2) the recent test of the upper line of the upward channel at RM6.40, which is likely to be followed by a price pullback to the middle of the upward channel.

If you choose to sell or reduce your position in GenM, the best price obtainable is RM5.70-5.80.

Note:
 
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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