20051109 Technical Outlook JetFM

Despite last minute buying of selected blue chip stocks to push CI to close at 911.53, CI opened slightly lower at 911.43 as there was no follow through action(s) from previous day, traders were not seen interested to chase for stock(s), stock index took a dip to trade lower, CI subsequently fell to an intraday low of 906.49 before settled at 909.10 on last minute buying of selective blue chip stocks. For Wednesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 911.6 & 914.1; 1st and 2nd support levels will be 906.5 & 903.9.
 
Chart wise: Profit taking pushed CI lower. Following the down close on 7/11/2005, CI continued to come under selling pressure as profit taking activities rolled in, CI was particularly weakened when sellers sold their shares down to break the 910 level. Sellers decided to lock in their trading profit(s) available to them first in anticipation of more downside in the stock market. At this juncture, the rebound we saw in CI from 902.39 on 28/11/2005 to 915.87 on 7/11/2005 could only be deemed as a technical reaction in the recent market decline, CI would be expected to go lower than 900. However, this expectation would be further strengthened if CI could close below 904 in next few days. While CI was expected to trade lower, 915 remained as a crucial level to watch on the upper side, because a close above this 915 level would signal a turnaround of stock market from down to up. Nevertheless, yesterday volume was smaller at 215.80 million compared to 7/11/2005, a sign of unwillingness to heavily commit “short” position; thus, we would not be seeing CI to fall very much in today market. An analysis of the market action(s) revealed that selling pressure was much stronger than buying power. Traders were simply not interested to buy stocks at this price level, they were in fact more keen to take profit(s).
 
Technical wise: MACD line cut down the signal line from above to emit a “sell” signal on 17/10/2005. MACD line was seen moving away from the signal line with readings fell to -3.59 (8/11/2005) from -3.92 (7/11/2005), signal line readings has also weakened to -3.51 (8/11/2005) from -3.49 (7/11/2005), an indication of a downtrend market. On Directional Movement Index, -DMI crossed over +DMI on 8/11/2005 to indicate a stronger down move. On the reading scales, -DMI was unchanged at 22 on 8/11/2005 and +DMI fell to 20 from 24 on 7/11/2006. ADX fell lower from 42 (7/11/2005) to 35 (8/11/2005), an indication of a weakened trending situation compared to 7/11/2005. As for Stochastics, %K line cut above the %D line in the oversold zone to give a “buy” signal on 31/10/2005. %K rose to 20.4 from 17.3 (7/11/2005) with %D also went up from 14.8 (7/11/2005) to 17.6 (8/11/2005).
 
Our stock recommendation(s) for today is(are):
AWC (Trading Buy) at RM0.26 with a stop loss at RM0.23

20051108 Technical Outlook JetFM

Technical Readings : Following the strong close of 913.92 on 2/11/2005, CI opened at 914.70, 0.78 point higher than previous close, stock index traded to an intraday high of 915.87 as traders bought in some good bargain hunting stocks; however, “Funds” saw this increase as an opportunity to sell to lock in their gains, CI as a result came under pressure to trade lower to 907.8 before settled at 911.53 on last minute buying of blue chip stock(s).
 
For Tuesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 915.6 & 919.8; 1st and 2nd support levels will be 907.6 & 903.6.
 
Chart wise :
 
... Profit taking pushed CI Lower…..
 
After registered 3 consecutive up closes, CI was under some profit taking activities to close lower as stock index failed to go higher than 915.87 and the stock index was particularly weakened when CI breached below the 914.7 opening level, “Funds” did not want to take any chances for not selling, they liquidated a portion of their stock portfolio(s) to lock in some of the profit(s).
 
915 remained as a crucial level to watch. Even the closing level failed to create a small key reversal bar, CI was still expected to trade lower in next few days as the buying up from 907.8 level was not fully tested along the way to 911.53. Furthermore, an increase in trading volume on 7/11/2005 compared to 2/11/2005 has also added the weight(s) of seeing a lower market.
 
While CI was expected to face with some hurdle to stage higher after what had happened yesterday, it would certainly provide a stronger indication of a downward move if CI were to settle below 905, traders would then be better convinced of a bearish scenario.
 
An analysis of the market action(s) revealed that selling pressure was much stronger than buying power. “Funds” were simply only interested in taking profit(s) after CI made a 10 – 13 point(s) gain over the last 4 days.
 
Technical wise : MACD line cut down the signal line from above to emit a “sell” signal on 17/10/2005. MACD readings rose to – 3.66 (7/11/2005) from – 3.92 (2/11/2005) with signal line readings weakened to – 3.49 (7/11/2005) from – 3.42 (2/11/2005), an indication of a slow down of a downtrend market.
 
On Directional Movement Index, +DMI turned downward after the cross over on 31/10/2005 to indicate a slower up move. On the reading scales, -DMI was up to 22 from 17 on 2/11/2005 and +DMI fell to 24 from 33 on 2/11/2006. ADX fell lower from 51 (2/11/2005) to 42 (7/11/2005), an indication of a weakened trending situation compared to 2/11/2005.
 
As for Stochastics, %K line cut above the %D line in the oversold zone to give a “buy” signal on 31/10/2005. %K rose to 17.3 from 14.4 (2/11/2005) with %D also went up from 12.4 (2/11/2005) to 14.8 (7/11/2005).
 
 
Our stock recommendation(s) for today is(are) :
 
Unisem (Trading Buy) at RM1.42 with a stop loss at RM1.36.

20051107 Hwang DBS Daily Focus

Highlights
>
> 
>
> Road to riches - Maintain Neutral
>
> 
>
> In our toll road universe, there are some companies generating stronger
> cash flow in the next two years that will lead to higher dividends. We
> find that the share prices of some major European toll road companies have
> trended up with consistently higher dividends. Also, the stronger cash
> flow will likely result in more investments partly because of the
> infrastructure boom in China, India, Thailand and Indonesia. Asian and
> European stocks have different accounting policies relating to toll assets
> and amortization/depreciation. We dedicate a section to implications of
> these policies. Lastly, we compare differences in key parameters (traffic
> growth, toll rate setting mechanisms, cost structures) and valuations for
> our toll road universe. Buy Hopewell Highway (737 HK), China Merchants
> (CMH SP) and Litrak (LTK MK).
>
> 
>
> Comments
>
> 
>
> Government under pressure to increase tariff next year - Maintain Buy
>
> 
>
> The Minister of Water, Energy and Communications Datuk Seri Dr Lim Keng
> Yaik was quoted in the local dailies as saying that the government only
> guarantees that there will not be a tariff increase this year. The
> government is aware of the problem faced by Tenaga with the rising cost of
> fuel to generate electricity. The article added that the pressure is on
> the government to increase the tariffs (next year).
>
> 
>
> This confirms our earlier belief that a tariff hike is envitable in early
> 2006. We also believe that the recent selldown of Tenaga has been
> unwarranted. Hence, we maintain our Buy recommendation with a DCF based
> RM12.00 price target.
>
> 
>
> Errant housing developers exposed - Maintain Neutral
>
> 
>
> The Housing and Local Government Ministry has taken a step further in
> making public the details of errant developers on its website. The website
> (http://www.kpkt.gov.my) contains postings on offences committed by errant
> developers and court charges brought against them under the Housing
> Development (Control and Licensing) Act 1966 (Amendment 2002) from January
> 2003 to September 2005. More than 500 housing developers were listed on
> the website booked under various offences. The fines varied from RM1,000
> to RM10,000 for each developer. And the most common offence relates to
> late filings of the developers' accounts to the ministry on the progress
> of the projects and various offences in relation to non-compliance of the
> advertisement regulations. Browsing through the list of offenders, we
> noted several subsidiaries of listed companies and government linked
> companies which included (but not limited to) IGB, Glomac, Talam,
> Boustead, Uda, Lebar Daun, Sunway, SP Setia, RB Land, Negara Properties,
> Guthrie, Gamuda and LBS Bina.
>
> 
>
> Given that most of the listed property developers are booked for various
> offences, it is therefore inconclusive as to whether any of these
> developers will be disadvantaged by this negative publicity. On their
> financial impacts, the "small" fines imposed by the ministry are not
> expected to cause any damage to the developer. We maintain our Neutral
> call on the sector. Our top pick remains Sunway City (Buy, SCITY MK,
> RM2.90 price target).