Chart 1: Mudajaya's 60-minute chart as at Sept 3, 2010_11.13am (Source: Quickcharts)
From the daily chart below, we can see that the next horizontal support is at RM3.20-3.30.
Chart 2: Mudajaya's daily chart as at Sept 3, 2010_10.00am (Source: Quickcharts)
For those having the stock, you may want to reduce your position ahead of the test of the recent low of RM3.75. If Mudajaya can recover from the test of low, you may buy back the shares sold earlier. If it breaks below the RM3.75 level, you should close your position in this stock.
For those looking to get into the stock, you may do so once the test of the low has yielded a favorable results. This will take the form of a sharp rebound above RM3.85-3.90. This is a high risk & high reward trade that is strictly for the strong heart & nimble finger. If the trade does not work out in your favor (with a breakdown below the RM3.75 level), we may be staring at a quick move to the next horizontal line of RM3.20-3.30.
Check out an example of Test of the Low (here).
hi alex. please comment on BJCORP after credit suisse buying 8.51% stakes in BJCORP. It is time to enter now ??
ReplyDeleteHI alex, how do u think the hard disk demand now? Plan to buy JCY or Notion
ReplyDeleteHi Alex, Its been an interesting week with all thats happening and appreciate your analysis very much.
ReplyDeleteWith ref. to Mudajaya; I bought this at 5.23 sometime back after seeing their results and seeing some very good reports. Its been hell since!
I see that they are buying back the share, and that they are now on the Forbes list as one of the leaders. I believe it will pull back over time. So if you can hold, maybe worth keeping. Your view may differ.
On another issue, whats happening with B Corp. Whats your view over 6 months?
Cheers
Thomas
Hi ThomasKG,
ReplyDeletei feel relief as bought at 4.40. still already lost more than 10% of investment. for your information mudajaya has been on the forbes list all these while, it is not a new or good infor to push the market up, based on the respond query from bursa, i think what mudajaya did on all the transactions and transfer of fund, and the fund invested in the subsidiary co in india, also the premium paid to acquire 26% share holding is valid, as i am working in the corporate and these restructuring and fund management is a norm, i dont understand why the share price still dropping, what i really piss off is the mudajaya did not announce the actual date when they will pay dividend that make a lot investors wondering what they up to.
Anyway just hope the clarification from bursa will end soon.
hi Alex,
ReplyDeletei read Mudajaya is given buy rating by research houses, some even put TP of 7.
any thoughts of the selldown?
on JCY, it was sold down early this wk, then CIMB said Outperform and suddenly it shot up like 20% now.sometimes i feel very skeptical about all this rating houses.
thanks
maxwealth88
Hi Alex,
ReplyDeletewhat do you think about Zelan? It seems like the price might be moving upwards slowly after GMO bought 5% stakes in it.
can u pls advice on this stock? i had some 5000 shares which stuck in it at 0.81. thanks
Dear Alex,
ReplyDeleteWhat do you think of Arreit's inject of new assets? Can that lower its yield?
Thanks!
A good accumulating opp.
ReplyDeleteGood tips.
Sky
Hi ysney, Yes I also relied on these on research reports on Mudajaya and dont understand why it fell so badly. Compare Sime's loss with Bakun and the recent report on an officer being charged in court; does not make any sense in comparison.
ReplyDeleteHi wong
ReplyDeleteIf Credit Suisse saw value in BJCorp now & bought a 8.51%-stake, we could do well to follow suit. However, you should nipple slowly as it is still in a downtrend line with resistance at RM1.12-13. The outlook would be less bearish if it can stay above the RM1.00. I arrived at this price by drawing firstly, a parallel line to the downtrend line and then, a middle line in between the downtrend line & the parallel line. BJCorp has just climbed above the middle line. From here, it may slowly recover & climb up.
Hi cheer
ReplyDeleteMy knowledge on tech stuff is not great. I get what I read from the paper, especial the Edge. For now, my take is hard disk demand is still weak. Both JCY & Notion are in downtrend. If you want to nibble some, you may try Notion at RM1.50-1.60 and JCY at RM0.90-1.00. The recent selldown maybe overdone as some experts are saying that the new cycle for corporate spending on IT systems may be about to take off. Who knows who is right & who is not?
Hi ThomasKG
ReplyDeleteThis is my comment on the same stock to another reader:
If Credit Suisse saw value in BJCorp now & bought a 8.51%-stake (I have not verified this), we could do well to follow suit. However, you should nibble slowly as it is still in a downtrend line with resistance at RM1.12-13. The outlook would be less bearish if it can stay above the RM1.00. I arrived at this price by drawing firstly, a parallel line to the downtrend line and then, a middle line in between the downtrend line & the parallel line. BJCorp has just climbed above the middle line. From here, it may slowly recover & climb up.
Hi MaxWealth88
ReplyDeleteThe selldown on JCY was overdone. However the stock is still in a downtrend. The amount of shares placed out in the IPO would ensure that the stale bulls on this stock would be plentiful. I look forward to a bottoming phase for this stock, say around RM1.00, for a while before we can expect a sustained recovery.
Hi tan
ReplyDeleteZelan may have broken above its long-term downtrend line at RM0.66-68 in early August. A short-term uptrend line may have formed with support at RM0.60.
I am not sure about GMO buying a 5%-stake in it. I anticipate some excitement for this stock as Malaysia will be building more power plants over the next few years. India will be going big time into power plants construction and Zelan should be able to ride on this cycle. The GMO team may have done their research & feel the same way.
Hi steve
ReplyDeleteI have no comment on REITs. I doubt the management of Arreit would inject of new assets into its portfolio if these assets would not be earning accretive.
HI Alex,
ReplyDeleteHow do you think CPO in next Q as I am planning to enter TDM. Provide me your view.
TQ
Hi Alex,
ReplyDeleteI just saw some very confusing offer from SAAG.(In the KLSE web page) How do you interpret this and its value?
ThomasKG
ReplyDeleteRead the news http://www.btimes.com.my/Current_News/BTIMES/articles/muds-2/Article/
According to news, bursa will not have any more query for mudajaya, but still have one report to be submitted by auditor Ernt & young,it market price shoot up before the news.
Hi Alex,
ReplyDeleteFirst I must declare that this comment is a constructive comments, and not a negative criticism. While technical analysis has been used by you and many seemingly successful traders, it always intrigues me. How a technical chart basing on past information can be used to model successfully the human behaviour in the future? for example, you said, (quote) 'Mudajaya has broken the horizontal lines of RM4.06 and RM3.90. Its next support is at RM3.75. The indicators are negative with RSI going deep into oversold territory & the -ve DMI is swinging up (both are precursors to a sustainable trending action in the same direction of the current trend).'(unquote) I presume one should sell now at RM4.00. But look what happen in the late trading on 4/9/10, Mudajaya jumped and closed at RM4.48. Has it broken its resistance and going for the uptrend now? Should one buy now? If one buys, I will not be surprised that it may go down again to RM4.00 (wild guess). Then how? Sell again and take loss again? This strategy seems to be extremely risky for small timers who are at the mercy of big boys manipulating the market at their wish. If I am not mistaken, I have read many articles claiming that even without those manipulations, technical analysis generally has underperformed the market, statistically significantly. The plausible reason is all the transaction costs involved.
Hi cheer
ReplyDeleteCPO is trapped with a rising wedge. If it can break above RM2800, it will continue with its prior uptrend.
On TDM, I will say that it is a good company with one foot on the plantation sector & another foot on the health care sector. At the current price of RM2.10 & annualized EPS of 29 sen for FY2010, TDM is now trading at a PE of 7.2 times. I would rate it a good trading BUY as well as a good long-term investment.
Hi ThomasKG
ReplyDeleteI read the announcement on SAAG's fund-raising exercise. It is going for the following:
1) 2-call Rights Issue with free warrant;
2) 5-year unsecured guaranteed exchangeable bonds; and
3) 5-year irredeemable convertible preference shares.
Before considering about this complex corporate exercise, let's look at Saag's financial performance & position.
Saag's financial performance has been very disappointing with no sign of improvement. What's alarming is its financial position- with high leverage & very suspicious current assets.
As at 30/6/2010, its gearing ratio or borrowings to shareholders' funds stood at 1.9 times. Most investors avoid companies with gearing ratio half that number. So you can expect very little buying interest in Saag.
What truly worried me is for a company with 1H2010 turnover of RM55 million, it has accumulated Amount owing by customer for contract works of RM368 million; Trade Receivable of RM240 million and Inventory of RM172 million. These enormous sums raised questions about the company's working capital management as well as the quality of these assets. If some of them cannot be converted into cash via sales or debt collection, Saag would have a huge write-off. Can its share capital & reserve cushion such setback? I doubt it. Hence, the need for a Rights Issue.
Based on this, I believe it is best to AVOID this stock!
Hi K C
ReplyDeleteYou wrote a long comment, with many good points. I would not go into the entire message, but only to deal with one point that you raised. You opined that a technical chart- basing on past information- cannot be used to model successfully the human behavior in the future.
The study of investors' behavior in the stock markets is similar to the study of human behavior in general, such as in the field of economics, psychology, market research, etc. Based on such study, a conclusion is drawn. In economics, we call him the rational man. In other field, a different name is given. Such valid conclusions are applicable in the future, but they do not always lead to the predicted outcome as human behavior sometime varies due to the presence of unforeseen variables.
From my study of the stock market & technical analysis ('TA'), I believe that all investors would benefit from the use of TA. To supplement it with Fundamental Analysis may be better as we would avoid some bad stocks. However from the trading point of view, even bad stocks are good for a trade if you know how to manage your risk.
dear alex,
ReplyDeleteplease comment on PLUS?What is a good entry point?tq
Hi diy
ReplyDeleteBased on its strong financial performance, PLUS has been valued by analysts at prices as high as RM5.00. From the technical perspective, the stock broke above the horizontal resistance of RM3.40-3.50. If we assumed a 1-time extension (of the previous trading band of RM1.00), the target would be RM4.40-4.50. On the other hand, if we assumed a 1.6-time extension, the target would be RM5.00-5.10. The good entry to PLUS would be at the psychological level of RM4.00.
Hi Alex, the announcement just released. It seems that quite negative. Will it impact the share price?
ReplyDelete