Wednesday, March 23, 2011

Perisai- a possible trading BUY

Yesterday, I posted that Perisai could be a trading BUY since it has broken above its long-term downtrend line at RM0.68 & the horizontal line at RM0.69. It eventually hit a high of RM0.77 before closing at RM0.74. Reader Ethan questioned whether the earlier attached chart was adjusted for a 5-for-4 Bonus Issue which was completed in May 2009. Unfortunately, Quickcharts did not adjust its data set. Below, I have attached the weekly & monthly charts for Perisai which I have obtained from Tradesignum.

Perisai seems to be rising within an upward channel [ABCD], except a breakdown in September 2008-February 2009 when it revisited the all-time low of RM0.21-0.22. Within the channel, we can see that an intermediate downtrend line (RR) has been capping the rise of the share price for the past 3 years. Perisai broke above that downtrend line yesterday as well as surpassing the last 2 years' high (or horizontal resistance) of RM0.69. With these double breakout, Perisai could be set to test the upper boundary of the upward channel (at D). That could be the target for the present rally, which is roughly about RM0.88-0.90. My earlier recommendation remained but the post is superseded by this post.


Chart 1: Perisai's weekly chart as at March 22, 2011 (Source: Tradesignum)



Chart 2: Perisai's monthly chart as at March 22, 2011 (Source: Tradesignum)

Hat tip to Ethan for pointing out this error.
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2 comments:

  1. cheerWednesday, March 23, 2011 6:30:00 PM

    Hi Alex,

    What is your comment about Hevea base on the recent requested by Donghwa ?

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  2. Alex LuThursday, March 24, 2011 12:25:00 PM

    Hi cheer

    Donghwa proposed to buy over Hevea's Property, Plant & Equipment related to the Particleboard division for at least RM245 million. Hevea has two divisions- the Particleboard & the RTA division (or the furniture division). As at 31/12/2010, Hevea's Fixed Assets amounted to RM293 million. Is Hevea selling the Particleboard assets at book value or at a profit? It is probably the latter but we cannot sure.

    Without the Particleboard division, Hevea is not exciting at all. It is just another furniture makers and we have too many of these companies. The only redeeming point is that it's relatively inexpensive as it is trading at only 0.5 time its book value.

    Chartwise, it's trading within the band of RM1.00 & RM1.10.

    ReplyDelete