Tuesday, December 04, 2007

TM poised to go higher

TM has been testing the strong horizontal resistance of RM11.00-20 (on 5 separate occasions) for the past 10 months. Yesterday, it managed to surpass that level by a mere 10 sen to close at RM11.30. Volume traded was quite large. If there is follow-through today, TM might challenge the overhead resistance at RM11.70, 12.10 & 12.70. As such, TM could be a good trading buy.

Chart: TM' daily chart as at December 3 (courtesy of Quickcharts)

Alternatively, you can consider TM-CF or TM-CG. The terms of these CWs are:
  1. TM-CF (exercise price: RM9.50, exercise ratio: 10 for 1, expiry date: May 23, 2008)
  2. TM-CG (exercise price: RM10.50, exercise ratio: 5 for 1, expiry date: July 21, 2008)
Based on yesterday's closing prices, the premium of TM-CF & TM-CG are 4.9% & 9.3%, respectively. The final CW, TM-CE is cheaper in absolute term but it has a very short period to maturity (as its expiry date is on January 4, 2008). A CW with such a short period to maturity is very, very difficult to trade in.

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