Wednesday, July 13, 2011

Cypark- the slide that never ends

I called a trading BUY on Cypark in March when its broke above its triangle formation at RM2.65 (here). It eventually went to a high of RM3.26 on April 5. Since then, the stock has been sliding. It broke its accelerated uptrend line(S1-S1) at RM2.80 on May 4. It broke the horizontal support at RM2.55-2.60 on May 20. It broke the uptrend line (SS) at RM2.15 on June 28. Today, it broke the horizontal support at RM2.00.

The company's financial performance is reasonably commendable. For 1H2011, it reported a net profit of RM12.8 million on turnover of RM83.6 million. Based on annualized earning of 18 sen, the stock is trading at a PE of 10.5 times (based on current price of RM1.89 as at 4.25pm). At that PE multiple, the stock appears fully valued. Earlier the market was prepared to pay a PE of 18 times for this stock. What happened? Are investors having doubts about Cypark's renewable energy projects?

From the technical perspective, this stock is likely to slide further as there is no strong support level below the psychological RM2.00 level. The stock may try to mount a rebound from either the RM1.50 level or the RM1.35 level. For those still having this stock, these are the times that truly try men’s souls. Do you go with fundamental analysis, which may call for a HOLD? Do you go with technical analysis, which points towards further decline & call for a SELL? The tough choice, as always, is yours.


Chart: Cypark's daily chart as at July 13, 2011_4.15pm (Source: Quickcharts)
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6 comments:

  1. luckystock2Wednesday, July 13, 2011 6:36:00 PM

    Hi Alex !
    I really learnt a lesson on this stock - Initial cut loss is a must no matter how strong is the fundamental.Im really suffering a great loss now.
    Any comment on Mahsing ? This one slowly going down also although EPF and Felda acquire quite a lot recently.
    Your help will be much appreciated. Tx!

    ReplyDelete
  2. AlwaysWinThursday, July 14, 2011 8:22:00 AM

    Alex
    There is a small gap at 1.74. Today's price is at fibonacci61.8% . if turns up from here may have a rebound. If not wait for gap support at 1.74. . What do you think ?

    ReplyDelete
  3. FrankKerThursday, July 14, 2011 8:03:00 PM

    Hi Alex,

    Really appreciate your analysis and views provided via this blog. It really helps me a lot in making my investment decisions.

    Huayang has just announced its quarterly report just now. Could you please share with us your thoughts on the prospects of Huayang?

    Thank you.

    ReplyDelete
  4. jackieFriday, July 15, 2011 8:45:00 AM

    HI Alex, how are you ?could you share your thoughts and analysis on guanchong ? have been monitoring this counter and its price has been rather resillient though the volume is really low. thanks

    ReplyDelete
  5. Alex LuMonday, July 18, 2011 11:00:00 AM

    Hi jackie

    My previous call regarding guanchong remained. I don't think it can outdo those exceptionally profit quarters. It is more likely than it would fall short than exceeding those high water mark. Reduce or sell into strength.

    ReplyDelete
  6. Alex LuMonday, July 18, 2011 11:03:00 AM

    Hi AlwaysWin

    Thanks for sharing. There is a gap in January at the price mentioned. We will see whether that would give a stock a bounce.

    ReplyDelete