Genting: Approaching Long-term Uptrend Line

For the past 2 weeks, Genting has been struggling to stay around the RM5.90 level which was the low recorded in December 2018. It traded to intra-day lows of RM5.81 before closing at around RM5.85.

However, Genting broke below the RM5.80 level yesterday to an intraday low of RM5.73. It managed to climb back up to close at RM5.80 in the last hour of trading.

If Genting failed to stage a strong rebound in the next 1-2 days, it may continue to go lower. However, if you look at the monthly chart, we can draw a tentative long-term uptrend line where the support is at RM5.40-5.50.

Based on this technical analysis, Genting's near-term outlook is negative as the share price has now convincingly broken below the last low of RM5.90-5.91. If Genting continued to slide, then the next support at the tentative long-term line at RM5.40-5.50 would be critical. We will have to wait and see how Genting will fare in the weeks ahead.

Chart 1: Genting's weekly chart as at Sep 18, 2019 (Source: Malaysiastock.biz)


Chart 2: Genting's monthly chart as at Sep 18, 2019 (Source: Malaysiastock.biz)

GenM: Outdoor Theme Park to Open in Jan 2019

Genting Group Chairman and CEO Lim Kok Thay told Singapore's Business Times that they plan to open the outdoor theme park by January 2019. For more, go here. For regular update of the construction work on the theme park, go here.

Over the past 2 months, GenM had been hit by 3 negative news; namely, increased casino tax, fallout with 20th Century Fox on the development of the outdoor theme park and huge impairment provision of RM1.49 billion (here). The latest news is a breath of fresh air for this badly beaten stock, which may provide the catalyst for a possible upward re-rating of the stock.


Chart 1: GenM's daily chart as at dec 17, 2018 (Source: Malaysiastock.biz)

The positive vibe may also help Genting, which had also dropped significantly over the past 3 & 1/2 months.


Chart 2: Genting's daily chart as at dec 17, 2018 (Source: Malaysiastock.biz)

For those who have been waiting patiently for a sign to get into these 2 stocks, this one maybe just what a good doctor would recommend. However, given the weak market sentiment, you would do well to buy slowly. Good luck!

GENTING & GENM: Hit by Increased Gaming Tax

The announced Budget for 2019 include increase in gaming tax for casino from 25% to 35%. The last increase in gaming tax for casino was in 1998. In an article in 2016, The Edge entitled "Is Gaming Tax Next to Go Up" an analyst from HLIB opined that a 1%-increase in gaming tax will lower earnings by3% for GENM and 1% for Genting. Thus it is not unreasonable to project that the proposed 10%-increase will lead to a 30%-drop in earnings for GENM and 10% for Genting.

The drop in share price for Genting from RM7.20 to an intra-day low of RM6.35 is about 12%. That nearly mirrors the expected decline in earning of 10%. Its immediate support is at RM6.50.

Chart 1: Genting's monthly chart as at Nov 2, 2018_9.30am (Source: Malaysiastock.biz)

Similarly, the drop in share price for GenM from RM4.54 to an intra-day low of RM3.18 is 30%. That nearly mirrors the expected decline in earning of 30%. Its immediate support is at RM3.30.

Chart 2: GenM's monthly chart as at Nov 2, 2018_9.30am (Source: Malaysiastock.biz)

The trading of these 2 stocks will be very volatile in the next 1-2 days. If you are looking to invest for long-term, you can do so gradually. This huge increase in gaming tax took 20 years to land. It will take another 20 years for the next increase to take place. Thus, this may be a good opportunity to buy into a good growth stock. I believe either one of these stocks are good. However the bigger bang may come from GenM since its Genting Integrated Tourism Plan is expected to be completed in 1H2019 (including the Twentieth Century Fox Theme Park which will be ready in 2Q2019). Good luck.

Genting: Intermediate Uptrend Has Ended

On June 7, Genting broke its intermediate uptrend line, SS which dates back to December last year. To stay within that uptrend line, Genting must quickly go back above RM9.85. Not only did Genting fail to do so, it also broke below its flag formation yesterday. This means that Genting’s intermediate uptrend has now reversed into a downtrend.

Chart 1: Genting's daily chart as at Jun 13, 2017 (Source: Shareinvestor.com)  

However, Genting still has a chance of not entering into an intermediate downtrend if it can stay above its previous long-term downtrend line, RR at RM9.60 (see the next chart). If Genting can stay above this price level, it has a chance of moving sideways and avoiding an immediate downtrend. 

Chart 2: Genting's monthly chart as at Jun 13, 2017 (Source: Shareinvestor.com) 

I would recommend investors to sell or reduce your position in Genting based on the following:

1) the breakdown of the intermediate uptrend line at RM9.85; thus ending the hope of higher prices, and

2) the downside breakout of the flag formation – which means a bearish reversal & possibly lower prices ahead.

You can choose one of these 2 options:

1) Sell on strength if Genting rose to RM9.70-9.80

2) Postpone your selling with the hope that the long-term downtrend line support at RM9.60 may forestall the further price decline. This may give an opportunity for Genting to recover back into the flag formation or, better still, above the violated intermediate uptrend line (no longer at RM9.85 but at higher prices at RM9.90-9.95). However, if the support at RM9.60 fails, the follow-thru selling can be fast & furious.

Note: 
 
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Genting: Poised To Go Up?

This morning, Genting broke above its recent intra-day high of RM8.40 recorded on Jan 12 & 16. It is now trading at RM8.50 which I consider to be the last stop before a quick rally to test the long-term downtrend line, RR at RM9.50. Genting had two important bullish breaks this month: the upside breakout of the horizontal line of RM8.20 on Jan 11 & the upside breakout of the intermediate downtrend line, R2-R2 at RM8.00 on Jan 5. Look at Chart 1 & 2 below.  


Chart 1: Genting's daily chart as at Jan 26, 2017 (Source: MalaysiaStock.Biz)    


Chart 2: Genting's weekly chart as at Jan 26, 2017 (Source: MalaysiaStock.Biz)     

The confirmation I am looking for is Genting-WA breaking above its horizontal line at RM1.52-1.53. You may see from the chart below that this warrant was quite unexcited by the above upside breakouts in the share price.


Chart 3: Genting-WA's weekly chart as at Jan 26, 2017 (Source: MalaysiaStock.Biz)     

Based on the bullish technical outlook, Genting is considered a possible trading BUY. You may choose to take a small position in Genting now and add to that position when Genting-WA breaks above the RM1.52-1.53 level. Good luck!

Note: 

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Genting: A Sudden Drop

Last Friday, Genting suddenly plunged from RM8.00 to a low of RM7.70 at 4:00pm. After some checking around, I can't ascertain the reason for the drop. The next day, there was no news in the market to explain the drop. I can only attribute it to "window-dressing activities" due to month-end closing.

If that's correct, Genting should hold at the current price level of RM7.80. This is a strong support level. In the event it failed to hold, the stock may test its very long-term uptrend line, SS at RM7.50 (see the monthly chart).

If you have the stock, you should just hold onto it. If you have been eying to get into Genting, this is a good level to consider.slow accumulation. Good luck!


Chart 1: Genting's daily chart as at Aug 30, 2016 (Source: Shareinvestor.com)


Chart 2: Genting's monthly chart as at Aug 30, 2016 (Source: Shareinvestor.com)

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Genting: A Double Whammy!!

Last night, a tour bus crashed down Genting, killing the driver and injuring 15 Chinese tourists (here). This morning, when investors saw the sharp drop in Genting share price, they would think it was an over-reaction. After all, the last 3 bus crashes (in 2010, 2011 & 2012) did not cause a sharp price drop.

What could be the real cause of Genting selldown is the failure of the drug, TauRx to pass the Alzheimer's disease trial (here). Genting has a 21%-stake in the company that owns the drug which was undertaking tests to meet US FDA requirement. If the drug had passed the test, it was reported that it could add more than RM2.00 to Genting share price. With the failure of the recent test, some of the recent price gain will be given back. How much will that be is the big question!


Chart 1: Genting's weekly chart as at July 28, 2016_11.00am (Source: Kenanga BTX/Chartnexus) (Note: Bus crashes in 2010, 2011 & 2013 were noted down in blue vertical lines)


Chart 2: Genting's daily chart as at July 28, 2016_11.00am (Source: Kenanga BTX/Chartnexus) 

Genting's immediate support will come from the horizontal line at RM8.20 and below that the psychological RM8.00 mark (which is very near the intermediate uptrend line, SS).

Based on the proximity of technical support, I feel that Genting is a HOLD for those having the stock. For those seeking to jump in, you can look at the RM8.00-8.20 level.

Note:
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, Genting.

Genting: Time To Take Some Profit

When I highlighted about the positive technical signs in Genting, I did not expect the share price to power-up in the manner it did over the past 4 weeks. Genting rose from RM8.17 to RM9.50 yesterday while its warrant (Genting-WA) rose from RM1.09 to RM2.07 in the same period.

From Chart 1 below, we can see that Genting is still in a downward channel (ABCD), with resistance at RM9.70. Genting-WA, which broke above its horizontal resistance at RM2.00 yesterday, may encounter its downtrend line, SS at RM2.25 soon.


Chart 1: Genting's monthly chart as at Mar 22, 2016_9.05am  (Source: ShareInvestor)


Chart 2: Genting-WA's weekly chart as at Mar 22, 2016_9.05am  (Source: ShareInvestor)

Given the sharp rally in the stock & its warrant, I believe it is a good time to take some profit. The good level to do so would be near the downtrend line for Genting at RM9.60-9.70 and for Genting-WA at RM2.15-2.25.

Note:
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, Genting & Genting-WA.

Genting: Positve technical signs

Market Observation

Over the past 3 weeks, we have seen a marked increase in the trading volume for Genting-WA which coincided with the warrant trading above its horizontal resistance at RM1.00. Genting-WA - convertible at RM7.96 on a 1-for-1 basis & expiring on 18/12/2018 - has a slight premium of about 11%.


Chart 1: Genting-WA's weekly chart as at Feb 18, 2016_3.00pm  (Source: ShareInvestor)

Technical Outlook

Genting recovered after it had tested its long-term uptrend line at RM6.50-6.70 in August last year. Is this the beginning of its next upleg or a technical rebounce?


Chart 2:Genting's monthly chart as at Feb 18, 2016_3.00pm  (Source: ShareInvestor)

Looking at the weekly chart, we can see that Genting has broken to the upside of its ascending triangle at RM8.00. The weekly MACD, which had crossed above its signal line, is poised to go above the zero line. When that happens, Genting's upleg will begin in earnest.


Chart 3:Genting's weekly chart as at Feb 18, 2016_3.00pm  (Source: ShareInvestor)

Result Update

Genting's top-line has been fairly stagnant at about RM4-5 billion a quarter for the past 4 years. At the same time, its bottom-line has been drifting lower due to slipping profit margins.


Table: Genting's last 8 quarterly results


Chart 1: Genting's last 38 quarterly results

Valuation

Genting (at RM8.17 as at 4.35pm) is trading at a PE of 19  times (based on its last 4 quarters' EPS of 42 sen). At this PER, Genting is deemed fully valued.

Conclusion

Despite the unimpressive financial performance & demanding valuation, Genting could be a good stock to trading purpose due to the developing positive technical outlook. 

Note:
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, Genting.