Astro has broken above the strong horizontal resistance of RM5.10

Astro has broken above its medium-term downtrend in early October at the RM5.10 level. Despite this breakout, the stock has yet to commence its uptrend move as the RM5.10 level has acted as the resistance that stopped further advances in the stock (until yesterday). Below RM5.10, the stock has been making higher 'lows' & thus formed a short-term uptrend line, with support currently at RM4.90. As noted, Astro has finally broken above this RM5.10 horizontal resistance yesterday & closed at RM5.20. This could be the beginning of the anticipated uptrend for this stock. See the Chart 1 & 2 below.


Chart 1: Astro's daily chart from Jan 1, 2006 to Nov 13, 2006





















Chart 2: Astro's daily chart from Jan 1, 2005 to Nov 13, 2006

For those who favor a trading approach, you may like to try out Astro-CA, which is a call warrant with exercise ratio of 2:1 & exercise price of RM4.65 but expiring on January 29, 2007. At the closing price of RM0.275 yesterday, Astro-CA is trading at its intrinsic value only, without any premium. This very attractive valuation could be due to its short tenor remaining but nevertheless this is a very good exposure to a semi-blue chip that has just achieved a bullish breakout.


Chart 3: Astro-CA's daily chart from Jun 1, 2006 to Nov 13, 2006

Based on the above, I believe Astro would make a good medium-term investment. Astro-CA would give a higher relative return but accompanied with higher risk.