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Tuesday, July 10, 2018

Topglov: Technical Rebound


Topglov is having a strong technical rebound today. If you managed to buy yesterday, you may be keen to know what are the resistance levels to aim to take some profit. I think the natural level will be the psychological level of RM10.00. I have drawn a few horizontal lines where resistance can be expected- RM9.90, RM10.35 & RM10.70.


Chart: Topglov's daily chart as at July 10, 2018_2.45pm (Source: Shareinvestor.com)

Despite the strong rebound in the share price, some Topglov call warrants are still dropping. In selecting call warrants to buy, you follow this set of rules:
1. Select CWs with adequate time to expiry (say more than 3 months)
2. Select CWs with low premium (say, 10% or less)
3. Select CWs with good gearing
4. Select CWs that's not too deeply OTM

Of course, we have skipped the first rule in picking CWs to buy; that's select the tight right stock. In this case, I believe that Topglov is still a good stock to BUY.

From klsescreener, I have extracted all the CWs of Topglov. I have sorted them according to their expiry dates. Only 4 CWs meet the first rule on time to expiry (highlighted in yellow). Only one CW, Topglov-C29 meets the remaining 3 rules (Note: The premium of slightly above 10% is stretching the rule a bit).


Table: Topglov's CWs terms & valuation (Source: Klsecreener)

Topglov-C24, C27, C28, C30 & C31 have very short time to expiry and carry substantial (time value) premium. Avoid these 5 CWs.

Good luck!

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