For the past few days, there has been very little worth posting on the blog. Even today, there was little to look at. For example, MISC chalked up a gain of 33 sen to close at RM8.43 on volume of 11364 board lots. It made an intra-day high of RM8.50. MISC's latest results for 9-month ended 31/12/2009 was fairly disappointing with net profit dropping from RM1.22 billion to RM486 million while turnover dropped from RM11.78 billion to RM10.47 billion. What could have sparked the strong rally in MISC? Chartwise, MISC seems to be forming a Head-&-Shoulders formation with the neckline support at RM7.30-40 (see Chart 1). I expect fairly strong resistance from the 30-month SMA line at RM8.51-52. Best to watch this stock from the sideline for now.
Chart 1: MISC's monthly chart as at Mar 1, 2010 (Source: Tradesignum)
Another stock that looked promising at first glance was ATIS. From Chart 2, it appears that ATIS may have broken above its long-term downtrend line at RM1.25. The chart of its last 12 quarterly results (Chart 3) shows a sharp rise in net profit & turnover for the past 2 quarters. However, the increase in net profit for these 2 quarters are attributable to one-off events, i.e. negative goodwill arising from the acquisition of Mutiara Goodyear of RM23.5 million (for QE31/12/2009) & exceptional gain on disposal of 16% equity in KVC of RM14.4 million (for QE30/9/2009). If these items are excluded, ATIS's financial performance has in fact deteriorated. As such, the present rally in the share price is somewhat surprising. Better to avoid ATIS.
Chart 2: ATIS's monthly chart as at Mar 1, 2010 (Source: Tradesignum)
Chart 3: ATIS's last 12 quarterly results
Table: ATIS's last 8 quarterly results
If you are wondering whether this post is a waste of our time, I shall leave you now with one promising stock to watch out for. IJM (closed at RM4.94) appears to have broken above its flag formation at RM4.90 today. With this breakout, IJM may continue on its prior uptrend. Its next resistance is its recent high & the psychological level of RM5.00.
Chart 4: IJM's daily chart as at Mar 31, 2010 (Source: Tradesignum)
For those who like a leverage play on IJM's potential upside move, you may consider its recently-issued warrant, IJM-wc. IJM-wc is a 5-year warrant expiring in October 2014 & convertible to share on a 1-for-1 basis at a price of RM4.00. IJM-wc (closed at RM1.17) has a premium of only 4.7%.
Chart 5: IJM-wc's daily chart as at Apr 1, 2010 (Source: Quickcharts)
Happy trading!!!
Good day Alex,
ReplyDeleteMany thanks for yr past insights. If you have times, could you provide some thought on Petra Perdana?
Hi Alex,
ReplyDeleteHow about share for EON (5266) ,HLBank,which is better ?
Hi solomon,
ReplyDeletePetra Perdana may have bottomed at RM1.20-30 over the past six months. The next upleg may begin once the stock has climbed above its 20-week SMA line at RM1.60. Early entry at about RM1.40 may be a good idea.
hi bro. please comment on FITTERS. since my remisier ask me to buy, said got major annoucement and will rise to above RM1.00. can buy?
ReplyDeleteHI phkoay,
ReplyDeleteEON's upside is fairly limited since it is trading very near to the HLBank's offer price of RM7.30.
HLBank has broken above its strong resistance at RM8.45 in early March but the expected rally did not unfold in earnest. The share rose timidly to RM8.70 & remained there.
It reported a 1H2010 EPS was about 31.7 sen. Based on its closing price of RM8.67 yesterday, HLBank is now trading at a PER of 13.7 times. At this multiple, HLBank is fully valued. See my earlier post (link provided below).
http://nexttrade.blogspot.com/2009/07/hlbank-poised-to-breakout.html
Hi wong,
ReplyDeleteChartwise, this stock has horizontal resistance at RM0.65, RM0.70, RM0.75 & RM0.85. With the ADX & the +DMI rising nicely, FITTERS may rally if the announcement is exciting enough. What is the announcement on FITTERS?
it's about biomass power project and 10% shares will place out to syndicates. volume quite active recently
ReplyDeleteHi Alex,
ReplyDeleteAny thoughts on the rubber glove counters ?
Tq.
This comment has been removed by the author.
ReplyDeleteHi Alex,
ReplyDeleteWhat's your take on PJDev and PJDev-WA?
Thanks..
hi Alex. please comment on TALAM. according to its latest annoucement, TALAM expect to apply upliftment of pn17 by end of april 2010. can start accumulate at current price? what it support and resistance?
ReplyDeleteHi Seong Wai,
ReplyDeleteRubber glove makers share prices are still racing upward. At this moment, I do not see any sign of a possible top from the chart. My only thought is that the laggards, such Adventa & Latexx, should do some catching with the front runners, i.e. Topglove, Kossan, Harta & Supermx. I do not consider Rubberex & IRCB as rubber glove makers.
Hi Cari,
ReplyDeletePJDev may be continuing on its uptrend, with the current move (on Mar 26, 29 & 30). The failure to make a new high exceeding the high of RM0.885 recorded on Jan 15 could mean another attempt may come later. For now, PJDev and PJDev-WA are likely to move sideway.
However, the outlook for PJDev could turn negative if it breaks below RM0.705. This is because you would have satisfied the condition for a downtrend with the presence of a lower 'high' & then a lower 'low'. RM0.705 was the recent low recorded on Feb 9.
Hi wong,
ReplyDeleteI don't know much about TALAM. If my memory serves me correctly, it has to sell off a lot of lands in order to settle with its creditors. Maybe its sales will pick up with the recovery of the property market. To look through a PN17 company restructuring is a lot of work. I don't want to get into that because my last two attempts (with Lityan & Time) did not unearth anything worth investing in. See the links below:
http://nexttrade.blogspot.com/2009/11/lityan-rising-on-hot-air.html
http://nexttrade.blogspot.com/2009/11/time-whats-up.html
Hi Alex,
ReplyDeleteThanks for the reply, as I am holding some PJDev and PJDev-WA now, last week it used to be on an uptrend, until this week it suddenly tumbled down. Do you think I should continue to hold this 2 counters? PJDev-WA is expiring on October..
Can you please shed us some light on buying a warrant which is going to be listed soon? For eg the offer price is 0.155, but on the day of listing the pre-opening price will surely be more than 0.155, is it due to private placement?
Hi Alex,
ReplyDeleteCould you comment on Spritzer? It had reach its high of RM1.00 now. Could it still be a good long term investment.
Thanks
Hi Cari,
ReplyDeleteWarrants approaching the expiry date will start to lose their premium. What's premium of a warrant? For example, IJM-wc (closed at RM1.17) which has an exercise price of RM4.00, has a premium of 23 sen and an intrinsic value of RM0.94. The intrinsic value is the difference between the price of the share, IJM (closed at RM4.94) and the exercise price of the warrant (RM4.00). The premium is the difference between the price of the warrant (RM1.17) & its intrinsic value (RM0.94).
Another example, PJDev-wa which has an exercise price of RM1.20. As PJDev & PJDev-wa closed at RM0.81 & RM0.075, respectively, the warrant has no intrinsic value & only premium of 7.5 sen. As PJDev-wa approaches its expiry date, the premium will start to disappear & PJDev-wa will become worthless.
The newer warrants issued generally trade at a premium of 20-30%. However, the cheaper warrants (eg. Redtone-wa & Scomi-wa) seems to have a floor of 10 or 20 sen- the result is that these cheap warrants have absurdly high premium. It is best to avoid the warrants of cheap stocks. Check out the list of warrants in the Edge for the valuation or the premium of each warrant.
Hi Alex,
ReplyDeleteWhat do you think about ALCOM?
Is it good for long term?