Monday, May 30, 2011

MAS- bites the dust

From 1994 to 2009, MAS share prices have been trapped within a giant symmetrical triangle. While there were a few downside breakout in late 2008 & early 2009, these breakdowns never developed into a sell-off as the share price hung on stubbornly to the lower boundary of the triangle.

In late 2009, MAS again broke to the downside of the triangle. Unlike previous breakdowns, MAS was unable to recover above the lower boundary of the triangle. However, the share price managed to stay above the RM2.00 level. Last week, MAS came under fierce selling pressure- 18 months after that breakdown. This sell-off has brought the share price to the present level of RM1.35. The next support at RM1.30 & if that failed, the stock may test its all-time low at RM1.00.


Chart 1: MAS's monthly chart as at May 29, 2011 (Source: Tradesignum)

Let's do a projection of the target for the current downside move. Assuming that this move is equivalent to the range of MAS share price over the past 2 years (of about 60 sen). The breakdown level was at RM1.60. Then, the target would be RM1.00.


Chart 2: MAS's weekly chart as at May 29, 2011 (Source: Tradesignum)

Based on technical analysis (projection studies included), I think MAS could have a decent rebound when the share price comes close to the RM1.00 level.
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7 comments:

  1. Mad InvestorTuesday, May 31, 2011 10:28:00 AM

    This is one GLC not going to make its KPI ;) andrew

    ReplyDelete
  2. AnonymousTuesday, May 31, 2011 10:44:00 AM

    Hi Alex,

    Can you comment on Maxis, I think this is the only blue chip stock still trading in very tight range. Any upside potential? expect its Q1 result to release by today, hopefully its interim dividend can can go up a bit more. Based on upcoming q1 1st interim dividend + cum final dividend, Maxis currently trade cum yield of at least 3% nett.

    ReplyDelete
  3. MaxWealth88Tuesday, May 31, 2011 4:36:00 PM

    i think we need idris jala back to run this company.
    maxwealth88

    ReplyDelete
  4. IvanTuesday, May 31, 2011 5:38:00 PM

    Bought mas around RM 1.40 . .but end of day, almost 100k done at RM1.38 .

    Hopefully the recoverly is intake after OVERSOLD season .

    ReplyDelete
  5. Alex LuWednesday, June 01, 2011 3:47:00 PM

    Hi hng,

    Maxis's EPS has been hovering around 7 sen per quarter or 28 sen per annum. At that earning, Maxis is trading at a PE of 19 times. It is hard to make a case to buy Maxis, don't you think so?

    ReplyDelete
  6. Alex LuWednesday, June 01, 2011 4:00:00 PM

    Hi MaxWealth88

    I think Idris Jala is glad that he is out of MAS. He picked all the low hanging fruit and left the hard work to the next guy.

    ReplyDelete
  7. Alex LuWednesday, June 01, 2011 4:01:00 PM

    Hi Ivan

    MAS has good support at RM1.30. It may recover from here.

    ReplyDelete