Wednesday, April 30, 2014

Ecowld: Broke the Strong Horizontal Support (UPDATED)

In the past 6 months, Ecowld (formerly, Focal Aim) took the stock market by storm. After breaking above the RM1.00 mark, this stock has literally flown away. For many market watchers who loved rags-to-riches story - and none came more impressively than Liew Kee Sin - Ecowld represents an opportunity to ride a sure winner. Or, is it?

As I read the story in the Star newspaper (here), I was stunned by audacious rise of this company, which in a mere 6 months time, has built up a landbank of 4433 acres with a GDV of RM43.5 billion. The title of the article "Old Soldier says he will rise and shine again" make me feel a bit uneasy. The words of wisdom from my old boss, P. H. Ling that new moneys who did not cash in at the peak of a cycle will drown in debts in a downturn. Liew is new money and he has just doubled down after the property market has risen so much. Is this a wise move or is it an ego trip? (UPDATED: One way to avoid the debt trap is to pay for land acquisition with shares: a case of over-priced shares in exchange with over-priced land. That may explain the meteoric rise in the share price of Ecowld.)

Meanwhile, I like to point out that Ecowld broke its intermediate uptrend line (SS) support at RM5.00, to close at the strong horizontal line at RM4.85 yesterday. This morning, it broke below RM4.85 and at the time of writing this post, it is down to RM4.60. Unless a strong recovery happens soon, the rise of Ecowld may have just ended.

Based on technical consideration, Ecowld is now a trading SELL.

Chart: Ecowld's daily chart as at Apr 29, 2014 (Source: Tradesignum)

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Ecowld.


lai said...

smart money should be moving to Maica soon.

Disclaimer : this is not a buy or sell invitation.

Unknown said...

It would be useful if you could do a market evaluation at this point