Thursday, February 10, 2011

CIMB has broken its uptrend line

CIMB broke its uptrend line at RM8.38-8.40 today. If it failed to recover above the uptrend line, the stock will drift lower. Its next support is at the horizontal line & psychological support of RM8.00. Avoid CIMB for now.


Chart: CIMB's daily chart as at Feb 10, 2011_11.00am (Source: Quickcharts)

The breakdown of CIMB uptrend line is an ominous sign. It is the second market leader to have broken its uptrend line that started in May 2010: the first being Genting. This could signal a deeper correction ahead for the broader market.

The aggressive stance taken by some Asian central banks in their fight against the growing threat of inflation has caused some anxiety among the Asian bourses. I have listed below the main indices that have violated their respective 50-day moving averages (Note. TWII is marginally above its 50-DMA). As posted earlier, our market is in a precarious position. A sharp correction in our market will likely to coincide with similar correction in other regional markets. Be careful...



Note: Our FBM-KLCI, at 1513 now, is also below its 50-day moving average of 1527.
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7 comments:

  1. desmondThursday, February 10, 2011 5:59:00 PM

    Dear Alex,

    May i know why today's klci drop so many? It is a kid of restructure?

    Thanks

    ReplyDelete
  2. leslieroycarterThursday, February 10, 2011 8:43:00 PM

    hi Alex:
    Going by the record drop in a single day at 32.08 points or 2.09% today . It is just a fraction off the support level at 1500. If tomorrow continue the downtrend , the next support level at 1475 will soon be breached. Hope this will be a healthy correction not a plunge?

    ReplyDelete
  3. Alex LuFriday, February 11, 2011 8:23:00 AM

    Hi leslieroycarter

    I am with you. Let's hope this will not be a plunge.

    ReplyDelete
  4. Alex LuFriday, February 11, 2011 8:29:00 AM

    Hi desmond

    Look like market is "slip & sliding away", like the song by Paul Simon & Art Garfunkel. FBM-KLCI broke the 7-8 months' old uptrend line support at 1540 on Jan 25. It is poised to test the 23 months' old uptrend line support at 1500 today. Can it rebound from here? Keep your finger crossed.

    ReplyDelete
  5. MaxWealth88Friday, February 11, 2011 2:38:00 PM

    hi alex,

    lately i see good report on Pantech.
    Pantech-LA has a 7% coupun rate. What does this mean?
    The conversion ratio is 6:1. Which is more worth it, to buy the share or the ICULs? Ths share has about 3-4% div yield.

    thanks
    maxwealth88

    ReplyDelete
  6. AnonymousTuesday, February 15, 2011 12:18:00 AM

    Hi bro Alex. Please comment on Samudra. This O&G stock moving up slowly. I heard it getting a substantial contract from Petronas soon. Thx.

    ReplyDelete
  7. Alex LuWednesday, February 16, 2011 2:23:00 PM

    Hi MaxWealth88

    If you are comparing yield of Pantech ordinary share (say, 4%pa) & its ICULs (of about 6%), the better choice is the ICULs. [Note: 7% coupon rate for an ICULs trading at RM0.115 gives you a yield of 6%].

    However, I have not read the report on Pantech. For 9-mth ended 30/9/2010, its net profit dropped to RM24 mil from RM40 mil previously while turnover dropped to RM263 mil from RM336 mil. Based on this earning & an enlarged share capital (plus warrants & ICULs), the diluted EPS is about 4.9 sen. At the present price, the stock is trading at a PE of 14 times. That's near full valuation for stocks in general.

    ReplyDelete