Thursday, September 09, 2010

Rubber glove stocks going lower


Today we witnessed a substantial rise in the share price of some rubber glove stocks. Among them are Kossan (gained 17 sen to close at RM3.34), Supermx (gained 19 sen to close at RM4.83) and Topglov (gained 10 sen to close at RM5.68). Is the worst over? I will let the following 3 charts answer that question. Compare the closing price of these stocks with their 200-day SMA:
  • Kossan (closed at RM3.34 cf 200-day SMA of RM3.50)
  • Supermx (closed at RM4.83 cf 200-day SMA of RM4.95)
  • Topglov (closed at RM5.68 cf 200-day SMA of RM6.02)
Compare the current negative cross-under with those recorded in second half 2007. Also, look at the positive cross-over recorded in early 2009. From these, you should get a good feel where the rubber glove stocks are heading. To me, the sign is very clear. They have just peaked & they are going lower. Avoid these stocks.


Chart 1: Topglov's daily chart as at Sept 8, 2010_log scale (Source: Tradesignum)



Chart 2: Kossan's daily chart as at Sept 8, 2010_log scale (Source: Tradesignum)



Chart 3: Supermx's daily chart as at Sept 8, 2010_log scale (Source: Tradesignum)

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18 comments:

  1. newbieThursday, September 09, 2010 9:17:00 PM

    Hi Alex,
    Take a break-lah,bro!!Here you are wishing everyone a happy Raya,and there you go analysing stocks again.Take a rest;there will be more analysis for you to do in the future.To all traders out there,have a very happy Raya and may all of you rake in more profits when you come back from the holidays.

    ReplyDelete
  2. UnknownThursday, September 09, 2010 10:35:00 PM

    Hi Alex,

    I hope you have the time to tell me the terms of ICPS (IRREDEMABLE CONVERTIBLE PREFERRED SHARES ).

    I had this TAGB, which they announced today 9th sept 2010 that some shares converted to ICPS.

    What is ICPS ?

    Happy Raya.
    Thanks

    ReplyDelete
  3. takeiteasyThursday, September 09, 2010 11:20:00 PM

    Hi Alex,

    Well said,

    Happy Raya everyone

    ReplyDelete
  4. diySaturday, September 11, 2010 8:51:00 AM

    Hi Alex,
    Plese kindly comment on Tenaga and its recent 1 for 4 bonus proposal. How this will affect its warrants?
    Thanks in advance

    ReplyDelete
  5. Ai LingSunday, September 12, 2010 8:24:00 PM

    Hi Alex,

    I have doubt.
    May i request your explanation about offshore trading of RM. Also, what are the pros and cons to our current economic. Some said it expose to speculation. I understand that all activities have risk, that is not uncommon and subject to balance.

    Thanks

    AL

    ReplyDelete
  6. CKMonday, September 13, 2010 9:21:00 AM

    HI Alex, hope you had a nice holiday break with your family and friends.
    Thanks for sharing on rubber glove stocks which you advised to avoid base on the technical analaysis. could you also share with us fundamental reasons if current price is a good buy or not. I see earnings are good and PE is low, which has tempted to buy in a bit. Is the strengthening ringgit the only reason that is pulling these stocks down ? thanks for your input.cheers

    ReplyDelete
  7. Alex LuMonday, September 13, 2010 10:13:00 AM

    Hi Bryan

    TAGB-ICPS is an Irredemable convertible preferred share. ICPS cannot be redeemed. It can only be converted to ordinary share. It's a preference share, meaning that it ranked higher than ordinary share in term of dividend payout & in the event of liquidation, it has priority over ordinary share. However, it does not have any voting rights.

    For the conversion price, please contact the registrar, Tricor Investor Services at 03-22643883.

    ReplyDelete
  8. Alex LuMonday, September 13, 2010 10:21:00 AM

    Hi diy

    I am positive on Tenaga because of increased demand for electricity. The recent proposed bonus of 1-for-4 bonus proposal will be the catalyst for a quick rally for the stock.

    Most of the CWs (if not all) have some protection against dilution arising from bonus issue or capital repayment. The protection may take the form of adjustment in the exercise price or even an equivalent bonus issue of CWs. To know the exact forms of protection, we need to read the term sheet for each CW issuance.

    ReplyDelete
  9. Alex LuMonday, September 13, 2010 10:25:00 AM

    Hi Ai Ling

    Sorry, I can't advise you on the offshore trading of RM. I don't know much about it.

    ReplyDelete
  10. MaxWealth88Monday, September 13, 2010 1:56:00 PM

    hi alex,

    what do you think about POS and PROTON? pls advise on good entry price.

    thanks
    maxwealth88

    ReplyDelete
  11. AnonymousMonday, September 13, 2010 3:06:00 PM

    hi bro. please comment on BJCORP. what is BJCORP downtrend resistance ? breakout what price can enter ??

    ReplyDelete
  12. AnonymousMonday, September 13, 2010 4:59:00 PM

    hi alex. what is ur target price for CI ?? and what is CI support level ??

    ReplyDelete
  13. MasonMonday, September 13, 2010 8:00:00 PM

    Dear Alex

    Can you comment on MAMEE and what is the entering price that you recommend?

    Thank you~

    ReplyDelete
  14. cheerMonday, September 13, 2010 9:08:00 PM

    Hi Alex, is JADI is a good choice for long term investment ?

    ReplyDelete
  15. Alex LuTuesday, September 14, 2010 11:25:00 AM

    Hi MaxWealth88

    The good entry level for POS and PROTON are at RM3.20 & RM4.75, respectively. The strong resistance level for POS is at RM3.35 & then RM3.80, while for PROTON, they are at RM5.00 & RM5.30.

    ReplyDelete
  16. Alex LuTuesday, September 14, 2010 11:29:00 AM

    Hi wong

    The downtrend line resistance for BJCORP is at RM1.08. If upside breakout happened, you should get into the stock as early as possible.

    ReplyDelete
  17. Alex LuTuesday, September 14, 2010 11:39:00 AM

    Hi Mason

    MAMEE is in an uptrend line with support at RM3.30. You may use that as an entry level.

    Technically speaking, MAMEE has risen a lot- from RM0.85 in November 2008 to a high of RM3.78 in July 2010. If the uptrend line is violated, the stock might have suffered a bearish reversal & it could slide quite a distance. As such, it is hard to make a case to buy this stock for the long-term. One may try trading BUY at RM3.30 & take profit on a rebound. If it's well executed, it can be rewarding. Good luck!

    ReplyDelete
  18. Alex LuTuesday, September 14, 2010 11:48:00 AM

    Hi cheer

    JADI looks like a good stock for long term investment. There was a good write-up in the Edge The Edge recently.

    Technically speaking, it has strong horizontal resistance at RM0.31 & then RM0.36. Good support at RM0.30 & then at RM0.25-26.

    ReplyDelete