Will Airasia (5099) break out from its ‘sideway box’soon?

Airasia is forming triple bottoms?

Airasia has been trading in a sideway range from RM 2.20 to RM2.62 since 12 November 2013 until now. On 2^nd September 2014, price has cross-overed its long term Resistance MA 200.Since then, its trend was turned to uptrend as shown after the MACD and Signal line cross-over (MACD value is positive).Plus, RSI and Price is showing bullish convergence, however its upside is limited by overbought condition as showed by (RSI>70).Last bar on 15^th sep 2014, up bar closing mid may mean supply coming in-sign of weakness. So, I may expect a small retracement and may retest its support MA200 before moving up again. Besides, Airasia is forming triple bottoms. Do watch out VERY VERY CLOSELY, the activity around the resistance line at around RM 2.62.If there is very high volume around this supply line, plus if the smart money expect a higher price, most likely they will be pushing up via supply or gap up to discourage the lock-in traders around the sideways area from selling as the lock in traders will start to see some profits after the resistance line broken. A high chance of real break-out! Then the next resistance will be around RM2.97.

Disclaimer: It is just for sharing and educational purposes, it is  not a buy call.The author will not be responsible for any loss incurred from this trade.The information being shared here might not be accurate and up-to-date.Do consult your remisiers or financial consultants before taking any actions.Invest at your own risk!!!TQ

TA or FA or both?

Last time, I was a hard core fundamentalist, analyzing mainly Price Earning Ratio (PE), Return on equity (ROE), Dividend yields (DY), cash flow etc for stock selections.As for macroeconomic study, one has to know about the fiscal and monetary policies that may affect the stock market in each country.As the time passed, I slowly realized that if no smart money to push up a counter regardless of  how undervalued or good a stock is, it will not go far. Always remember that stock market is a money or number game! Hence, following the smart money footsteps will not go wrong! Of course, FA is still important. Buying a stock with a good FA to me is just as important as buying an insurance for myself, if financial crisis happens, although  initially its price may tumble a lot but it will eventually rebound back to its fair value one day. However,the chance is slim for poor FA stocks. Not all good FA stocks will move as there is no big boys supporting it.To me, good FA stocks serve as a catalyst or theme for the smart money to "fry". Later on, I started to learn technical analysis and volume spread analysis myself to strengthen my skills in trading.It works and it increases my chance of winning! However, Big crocs may purposely use TA to trap the retailers eg purposely breaking major support in order to shake out retailers, then buying back at low. (False break out).So one should be able to easily distinguish if it is a shake out or distribution by big crocs. Personally, I prefer leading indicators eg support and resistance plus Fibonanci retracement and also some lagging indicators eg RSI, Moving average (MA 200 for long term trend), Bollinger band.  Among all the informations available from a chart, which I think can not be artificially manipulated, that are always true, these are PRICE and VOLUME only. Hence, I think that volume spread analysis is logical and effective in trading, as it based on the most accurate datas found from chart-price and volume, plus it helps me to track the foot prints of smart money. A little bit more about the qualities of a good trader. A good trader needs 3Ms:Good method. Mindset and money or risk management.You do not have the win all the trades (even the professionals do not manage to do so), you just have to ensure that you lose little or gaining big in every single trade, in the long run, u are making profits from your trades. Be a disciplined traders, setting a stop loss and target or exit price before u trade. (Cutting loss is important but not in extreme oversold condition). Rule of thumb for trading: Do not risk more than 2% of your capitals used for every single trade. Eg, if you have RM 20 000, the maximum amount you afford to lose in every single trade is RM 400 in order to preserve your capitals.

Generally, FA tells u what to buy, TA tells u when to buy!

Kindly share your valuable comments here about your strategy in stocks investment by selecting  Fundamental Analysis (FA) or Technical Analysis (TA) or both?

Option 1 - Look at FA first , followed by TA. Option 2 - Look at TA only
Option 3 - Look at FA only
Option 4 - Look at TA first, followed by FA.

TQ!

The purpose of this blog is to share knowledge, news and personal opinion on investment, economy, stock market etc. There is no guarantee that all the information in this blog is accurate and up-to-date. Invest at your own risk! TQ.

Technical Outlook For Prestariang (Updated 1):

Presbhd closed at RM2.01 On 3rd September 2014.The last bar higher volume closing mid may mean supply coming in. Its price has formed a bearish flag as shown in the chart. Once the lower trendline of the flag at around 1.95 sth is broken, then the trend may change. The prices and RSI are showing Bullish Convergence (Both price and RSI is showing higher high and higher low). This means that the uptrend momentum is strong, plus it is oversold, hence there is a high chance that the trend will continue. Plus,EPF has just acquired its shares on 27.8.2014.Surprisingly, the amount of shares EPF its acquired this time is more than what had been disposed on 25/8/14 as reported by Bursa.For time being, EPF has a direct interest of 7.27% of its shares.Why EPF acquires more shares this time? Something big is going to happen? Plus, the ex date of the coming interim dividend will fall on 10/9/2014.With all these factors considered, will its share price surge again? Personally, based on the technical and long term fundamental outlook,i think most likely it will go up.I might be wrong.The next few days we will know.

The purpose of this blog is to share knowledge, news and personal opinion on investment, economy, stock market etc. There is no guarantee that all the information in this blog is accurate and up-to-date. Invest at your own risk! TQ.

Latitud- A slightly disappointing Quarter (Q4FY14) (Updated 1)

Latitud closed at RM3.33 on 29th August 2014 Before Merdeka Day

SUMMARY OF KEY FINANCIAL INFORMATION                                                                      30/06/2014

			INDIVIDUAL PERIOD		CUMULATIVE PERIOD
			CURRENT YEAR QUARTER	PRECEDING YEAR CORRESPONDING QUARTER	CURRENT YEAR TO DATE	PRECEDING YEAR CORRESPONDING PERIOD
			30/06/2014	30/06/2013	30/06/2014	30/06/2013
			$$'000	$$'000	$$'000	$$'000
1		Revenue	142,759	124,417	651,025	493,687
2		Profit/(loss) before tax	10,283	9,352	71,867	35,658
3		Profit/(loss) for the period	8,631	8,230	64,333	32,046
4		Profit/(loss) attributable to ordinary equity holders of the parent	8,681	5,949	55,008	24,366
5		Basic earnings/(loss) per share (Subunit)	8.93	6.12	56.59	25.07
6		Proposed/Declared dividend per share (Subunit)	0.00	0.00	0.00	0.00
			AS AT END OF CURRENT QUARTER		AS AT PRECEDING FINANCIAL YEAR END
7		Net assets per share attributable to ordinary equity holders of the parent ($$)	3.1700		2.3900
	SUMMARY OF KEY FINANCIAL INFORMATION 31/03/2014

		INDIVIDUAL PERIOD		CUMULATIVE PERIOD
		CURRENT YEAR QUARTER	PRECEDING YEAR CORRESPONDING QUARTER	CURRENT YEAR TO DATE	PRECEDING YEAR CORRESPONDING PERIOD
		31/03/2014	31/03/2013	31/03/2014	31/03/2013
		$$'000	$$'000	$$'000	$$'000
1	Revenue	146,773	107,218	508,266	369,270
2	Profit/(loss) before tax	14,809	5,822	61,584	26,306
3	Profit/(loss) for the period	13,573	5,769	55,702	23,816
4	Profit/(loss) attributable to ordinary equity holders of the parent	12,752	4,304	46,327	18,417
5	Basic earnings/(loss) per share (Subunit)	13.12	4.43	47.66	18.95
6	Proposed/Declared dividend per share (Subunit)	0.00	0.00	0.00	0.00
		AS AT END OF CURRENT QUARTER		AS AT PRECEDING FINANCIAL YEAR END
7	Net assets per share attributable to ordinary equity holders of the parent ($$)	3.0500		2.3900

Source: Bursa Malaysia

Latitud Q4 FY14 result was just released on 28^th August 2014. Latitude's FY14Q4 revenue (RM142.7m) has dropped 2.7% if compared to FY14Q3 revenue (RM146.8m) while the EPS for FY14Q4 (8.93cents) (which is below my expectation of at least 10 cents) has dropped 32% if compared to EPS for FY14Q3 (13.12 cents).The main reason for this drop is due to the loss of one week productions in its Vietnam factories as a consequence of the recent Vietnam riot, together with delay in goods delivery. However, both revenues and net profit if we compare qoq and yoy, it improves by 14.7% and 45.9% respectively. Besides, its NTA has improved by 3.9% from RM3.05 to now RM3.17. So any price below RM3.17 is still a good buy for time being.

The EPS for whole FY14 is 56.6 cents, with closing price on 29^th August 2014 RM3.33, Latitude is trading at a PE of 5.88x.If we give Latitude of conservative PE of at least 7, then its target price should be  RM3.96 and above.

On 29^th August 2014 (after the result day), Latitud has gapped down from previous closing price on 28^th August 2014 (RM3.60) to RM3.46 and eventually closed at RM3.33 with a high trading volume of 16.9k.The gap down was mainly to the poorer than expected quarter result due to recent Vietnam riot and also ‘recent excessive surge or profit taking before result out’as predicted in my previous post:

http://commoncents2011.blogspot.com/2014/08/latitud-moving-to-greater-altitude.html

As long as Latitud is above her long term uptrend support line MA200, her bullish trend still remain intact.

In addition to this, I will expect there is a slight pull back or correction in this 1 to 2 months time before the next wave of rally.There will not be any big move for Latitud unless there is a sudden breaking news/announcements.

The main catalysts/themes for Latitud next surges:

1) Continuos and Increasing demand of furniture from US as a result of US economic recovery, home sales and increasing consumer spending sentiment, strengthening of US dollars which facilitates the export of furniture and etc.

2) Possible proposed of 1:2 bonus issues due to its abundant reserves as a reward for the shareholders

3) Special dividend or higher final dividend pay out ratio?

Historically, Latitude will only pay dividend once a year during December. As according to FY13, the company paid out 25% from its net profit as final dividend to reward its shareholders. Conservatively, if I assume that its company still maintains its current dividend pay out ratio of 25%  this means that it might pay 14.15 cents (56.6 cents x 25%) for FY14. If we calculate it in dividend yield, that will be 4.25% yield based on its closing price at RM3.33 on 29^th August 2014. In view of its abundant capital reserves and increasing net profit , the final dividend  of >25% pay out or special dividend is very likely.

4) Full contributions from Vietnam operations or factories will only be seen in FY15.

          The possible risks to be weighed:

      1)  Latitude is a cyclical stock-which depends  very much on US   

          economy. A hiccup in US economy will have a great impact on   

          its share price.

      2)  Vietnam issues

      The purpose of this blog is to share knowledge, news and personal opinion on investment, economy, stock market etc. There is no guarantee that all the information in this blog is accurate and up-to-date. Invest at your own risk! Happy Merdeka Day in advance!TQ.