Tenaga: Broke Its Long-term Uptrend Line

Tenaga broke its long-term uptrend line, SS at RM14.00 on December 5. In the past 3 days, Tenaga struggled to stay above the horizontal line at RM13.50. At 10:15am this morning, Tenaga once again broke below the RM13.50 horizontal line.

The last time Tenaga dropped significantly below RM13.50 was on December 10 when it made an intraday low of RM13.30. A few minutes ago, Tenaga made a low of RM13.24. If Tenaga cannot recover above the RM13.50 horizontal line again, then it may see further downside. Its next strong support will be at RM12.00.


Chart: Tenaga's monthly chart as at Dec 13, 2018_10.30 (Source: Malaysiastock.biz)

Tenaga: Testing Long-term Uptrend Line

In the current market selldown, Tenaga was not spared. It has dropped from about RM15.50 in early October to an intraday low of RM13.80 on October 11. It even closed at RM14.00 yesterday. It is now trading not far from the long-term uptrend line, SS. 

Tenaga is our sole power distributor in Peninsular Malaysia and Sabah. It is also the biggest power producer in the country. Thus it will benefit from continued demand for power in the country.

Tenaga has been valued above RM17.00 by many brokers. For example, Kenanga valued it at RM17.90, AMInvest valued it at RM17.25. HLInvest values it at RM17.50.

Based on good valuation and recent sharp price decline, I believe Tenaga is at a good price level to consider for entry. Good luck!

Chart: Tenaga's monthly chart as at Oct 23, 2018 (Source: Malaysiastock.biz)

Tenaga: The Cost Pass-through Rule Still Applies (Updated)

This morning, Tenaga jumped up more than RM1.00 after it announced that the Government of Malaysia (“Government”) has approved, via a letter from Suruhanjaya Tenaga (“ST”) dated 28 June 2018, the continued implementation of Imbalance Cost Pass-Through (“ICPT”) for the period of 1 July – 31 December 2018. For more, go to here.

Chart 1: Tenaga's daily chart as at June 29, 2018 (Source: Shareinvestor.com)

This is a positive development as the market was concerned over the past few weeks that Tenaga may have to do "national service" by absorbing instead of passing through cost increases. In fact, the market - which is under selling pressure from foreign funds - was gripped by the fear that the new government will go after these companies for their past link to Najib & UMNO. I find that illogical because most of these blue chip stocks are government-linked companies. By default, they are owned by the people of Malaysia. The new government will not be so silly as to harm these companies even if their Chairmen were friendly to Najib & UMNO. The most logical thing to do is to put some pressure on their Board of Directors to remove the Chairman. That's why I believe the sell-down of CIMB is grossly overdone.  

Chart 2: CIMB's daily chart as at June 29, 2018 (Source: Shareinvestor.com)

The Government's decision in regards to the Tenaga cost pass-through rule suggests that it cannot simply pressure TM to lower its broadband charges. Earlier the minister concerned has declared that Unifi should lower its broadband charges by 25% by end of the year (here). This call by the minister has added pressure on TM share price - leading to a sharp drop over the past few weeks.

Chart 3: TM's daily chart as at June 29, 2018 (Source: Shareinvestor.com)

Tenaga: The Race is On?

The on-again, off-again next upleg for Tenaga may be settled today. If Tenaga can maintain the price level achieved yesterday or, better still, surpass the intra-day high of RM15.46 recorded on October 27, Tenaga rally is on.

Chartwise, we can see that Tenaga has already broken above the horizon line at RM14.50. However many are very suspicious about the "true intention" of the upside breakout for Tenaga as this stock has often been used as a lever to catapult our main market barometer, FBMKLCI. Even yesterday, many market observers are scratching their heads and probably decided to sit on their laurels. If this is a real deal, Tenaga maybe on the way to RM19.00-20.00.

Please exercise careful discretion if you choose to buy into this technical buy signal.

Chart: Tenaga's monthly chart as at Nov 29, 2017 (Source: Malaysiastock.biz)

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.

Tenaga: You Have Other Plan?

Yesterday I posted  about Tenaga's strong rally on June 5. My belief was that the rally was a "window dressing" activity to prop up FBMKLCI above the recent high of 1785. Two days after the initial push-up, Tenaga is still hovering around RM14.20. There was good buying support yesterday and more importantly, the selling pressure seems to have subsided today. Such market action warrants a re-examining of the stock! 

Technical Outlook

Tenaga broke above its downward channel (RR-R"R") in March. It was not a convincing breakout as the share price slid back and leaned against the earlier downtrend line, RR for support. Eventually an upward channel was formed (SS-S"S"). Two days ago, Tenaga broke above the upper line (R"R") of this channel. Does this mean that the uptrend for Tenaga is about to accelerate?


Chart 1: Tenaga's daily chart as at Jun 7, 2017 (Source: MalaysiaStock.biz)

Tenaga is trading quite close to its recent high at RM14.50. Can Tenaga surmount enough buying support to break above the recent high?


Chart 2: Tenaga's weekly chart as at Jun 7, 2017 (Source: MalaysiaStock.biz)

Results Update

For QE28/2/2017, Tenaga's net profit was mixed- dropped 15% q-o-q but rose 12% y-o-y - to RM1.48 billion while revenue was similarly mixed- dropped 1% q-o-q but rose 6% y-o-y - to RM11.16 billion.Tenaga reported a lower operating profit of RM1,98 billion as compared to RM2,34 billion in the preceding quarter. This was due to a marginal decrease in revenue of RM79.3 million and higher operating expenses of RM255.5 million. (Tenaga's latest result was announced on April 27.)

 
Table: Tenaga's last 8 quarterly results


Graph: Tenaga's last 41 quarterly results

Valuation

Tenaga (closed at RM14.20 yesterday) is now trading at a PER of 11 times (based on last 4 quarters' EPS of 129 sen). At this PER, Tenaga is deemed fairly attractive.

Conclusion

Based on attractive valuation & positive technical outlook, I consider Tenaga to be a good stock for long-term investment. If you choose to treat my earlier post as a TRADING SELL call, you can do so provided you are nimble enough to jump back in if the stock cleared the recent high of RM14.50 (adjusted for dividend) or RM14.90 (unadjusted for dividend). Good luck!

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.

Tenaga: Thanks for the lift!

Tenaga went up 38 sen to RM14.20 yesterday, and helped to keep FBMKLCI o close at 1791. Tenaga rose on little to no news, and that is not likely to inspire follow-thru buying today.


Chart 1: Tenaga's daily chart as at jun 6, 2017 9Source: Shareinvestor.com)

If you look at yesterday trading for Tenaga and the underlying CWs, you will see that the transactions were concentrated on the stock and one of the CWs, Tenaga-C35.


Table: Tenaga & its CWs transactions on Jun 6, 2017 (Source: Kenanga BTX)

If there is no news on Tenaga today that can justify the sharp spike yesterday, Tenaga and Tenaga-C35 are likely to tumble down today. You should avoid these 2 securities.


Chart 2: Tenaga-C35's daily chart as at jun 6, 2017 (Source: Shareinvestor.com)

Tenaga: Testing Its Downtrend Line

Last month, I posted about the breakdown of the technical outlook for Tenaga. Tenaga appeared to have violated the neckline at RM13.55 of a head & shoulders formation, a reliable reversal pattern which should lead to Tenaga entering into a downtrend.

Two things we must take note of after that breakdown:
1. There was no increased in the volume of trading in Tenaga after the breakdown of the neckline
2. After a few days, Tenaga recovered back to around RM13.50 where it has remained ever since.

This week we saw more volatility in the trading of Tenaga leading up to the share price testing the 25-day SMA line at RM13.70. Yesterday, Tenaga tested the intermediate downtrend line, RR at RM13.80 but closed back below the line (at RM13.70). This morning it again tested the downtrend line and went as high as RM13.84. An upside breakout of the intermediate downtrend line could signal the beginning of the next upleg in Tenaga.

Based on the above, Tenaga is worth close monitoring.


Chart: Tenaga's daily chart as at Mar 8, 2017_12.00pm (Source: MalaysiaStock.Biz)

Based on technical breakout, Taliwrk could be a good trading BUY.

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.

Tenaga: A Potential Bearish Reversal?

Tenaga broke the strong support from the horizontal line at RM13.50-13.55. This is not your normal breakdown of horizontal line support; this is the breakdown of the neckline of a Head and Shoulders formation. The only consolation is that the breakout is not accompanied by an increase in volume. I hope that Tenaga will stage a strong rebound soon. 

Because of the breakdown, the technical outlook for Tenaga contradicts with the positive fundamental outlook for the stock. Thus long-term investors would certainly be in a difficult dilemma: To hold, to buy or to sell?? Let's forget about the next question: WHY? for now.


Chart 1: Tenaga's daily chart as at Jan 31, 2017_11:30 (Source: MalaysiaStock.Biz)

For now, I would say that if Tenaga can recover above the RM13.55 mark again, it would be a good BUY. Failure to break the neckline of a Head and Shoulders formation - normally a reversal pattern - would automatically convert it into a continuation pattern. However, if the breakdown is followed by continuous price decline on increased volume, then the bearish reversal is at hand. We must adopt the bearish view for Tenaga. It could easily slide to RM12.00-12.20 before any rebound kicks in.

Chart 2: Tenaga's monthly chart as at Jan 31, 2017_9.35 (Source: MalaysiaStock.Biz)

Based on the above, you should be very careful in buying into the current price decline in Tenaga. The correct approach is to sell if the price fails to recover above RM13.50. You should only buy if Tenaga can recover above RM13.50. Good luck!!

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.