Friday, October 23, 2009

Axiata & TM- being sold to make room for Maxis

The re-listing of Maxis on our exchange has caused fund managers to re-balance their portfolio by reducing their holding in existing telephony stocks & positioning to buy into Maxis- either before its listing or shortly thereafter. The losers in this exercise appear to be Axiata & TM.

From Chart 1, we can see that Axiata broke below its medium-term uptrend line support at RM3.10 yesterday. Its immediate horizontal support of RM3.00 is being tested now. If the stock does not recover above its medium-term uptrend line soon, it is likely to trade sideway or drift lower.

Chart 1: Axiata's daily chart as at Oct 22, 2009(source: Tradesignum)

TM may have broken below its medium-term uptrend line support at RM3.10 in mid-September. TM has been trading sideway, between RM3.05 & RM3.15 for the past few weeks. I have presented below 2 charts of TM, either unadjusted or adjusted for the capital repayment of RM0.98 in May.

Chart 2: TM's daily chart as at Oct 22, 2009 (source: Tradesignum)

Chart 3: TM's daily chart as at Oct 22, 2009- adjusted for Capital repayment of RM0.98 in May 2009 (source: Tradesignum)

I do not have any comment on the Maxis re-listing at this moment. However, I think that the current selling of Axiata may present a good buying opportunity for the stock. A good entry level is at the 100-day SMA of RM2.85-90, notwithstanding my earlier take on the technical outlook for this stock.

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