Tuesday, April 26, 2011

HPI & MAA broke their horizontal support

This morning, one of the top performer for the past 2 months- HPI- took a sharp plunge. It opened at RM3.62, a gap down when compared to yesterday's closing price of RM3.67. It continued to slide & broke below the horizontal support of RM3.40-3.43. This surprising bearish market action followed the announcement of a good set of financial results for QE28/2/2011 on April 22nd.


Chart 1: HPI's daily chart as at April 26, 2011_12.00pm (Source: Quickcharts)

The market action seen in HPI was also played out in another stock, MAA which broke its horizontal support at RM1.28 yesterday. That bearish breakdown was followed by further sell-off today. Like HPI, MAA will have to recover quickly above the violated horizontal support (which is now the resistance to overcome). Failure to do so would lead to more sell-off and possibly the end of the bull rally for both stocks.


Chart 2: MAA's daily chart as at April 25, 2011 (Source: Tradesignum)

based on the above, we should avoid HPI & MAA for now.
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5 comments:

  1. Fabien WongTuesday, April 26, 2011 9:52:00 PM

    Hi Alex, here is the list of stocks im currently eyeing at; Daibochi, Pantech, QL, Plenitude, DRB, Mudajaya and Notion. Do you have any comment on any of these stocks? Or perhaps maybe you can point out to me which is not a viable option? Thanks a lot!!

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  2. David ChanWednesday, April 27, 2011 3:08:00 PM

    Hi fabien,

    I been monitoring Pantech quite sometime. Like this stock too.

    Hi Alex,

    How about Homeriz?

    Thank

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  3. tanThursday, April 28, 2011 10:05:00 AM

    hi alex,

    is it normally when a company give dividen the share price will be adjusted lower on the ex-date?.I notice that most of the company is like that.so is it better to sell off before ex-date ?

    regards,
    tan

    ReplyDelete
  4. Alex LuThursday, May 05, 2011 3:44:00 PM

    Hi ks

    The adjustment after the entitlement date is only fair. If a stock traded at RM1.10 cum 10-sen dividend, it should be trading at RM1.00 ex 10-sen dividend. Whether to go through with the dividend or otherwise would depend on how much the share price has appreciated prior to the ex date. If the share price has gone up more than the dividend to be paid out, then it would be advisable to sell cum dividend. However, some stock may adjust less than the full amount of the dividend. This normally happens to fundamentally good stocks, such as PBBank. There is no hard & fast rule on this matter.

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  5. Alex LuThursday, May 05, 2011 4:16:00 PM

    Hi Fabien Wong

    I will give you a quick take:

    1) Daibochi attempted to break above its downtrend line at RM2.70 recently.

    2) Pantech is still in a downtrend line with resistance at RM0.75.

    3) QL has just tested its recent high at RM3.30.

    4) Plenitude is in a medium-term downtrend line with resistance at RM2.10.

    5) DRB is in a short-term downtrend. Its support is the medium-term uptrend line at RM2.00-2.05.

    6) Mudajaya's immediate support is the horizontal line at RM4.45. Thereafter, it may find support at RM4.00 & then RM3.80.

    7) Notion has broken above its downtrend line, as noted in my recent post. It is consolidating its recent gain & it may test the horizontal line at RM1.95-2.00 & then at RM1.80.

    ReplyDelete