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Further to SOP and Mr Koon's comments

Understanding when to buy and when to sell are important skills that one must develop in the stock market or any market for that matter. There are many Buy and Hold investors out there that only know how to buy but never know how to sell because they fear they lose out on the uptrend. You can see what we advocate, ie buy at support and sell at resistance at our website, www.kiasutrader.com

One should have a strong understanding of technical as well as fundamental analysis and on top of that, be market savvy in the sense that one should check the background of who the shareholders are before investing.

As an example, look at what happened to Solution Engineering today. When I first looked at the price chart last month, it looked like a possible buy at 0.25 levels technically. On checking, I also saw that it is a cash rich company with a great liquidity ratio of 5.90 and low debt to equity ratio of 5.32% as at 31 Dec 13. But when I looked at the revenue growth, it was a negative 7.43% for 5 years, which is a bit disconcerting. Its revenue had been jumping up and down for the last 5 years with operating expenses to revenue of nearly 94% meaning that it is hardly getting any money back for all its work! A check was also made on the company background and who the major shareholders are as I do not really know what this company does and who is behind it.

Today the company share price "tanked" 52% to 0.13 from 0.275 last friday, going below the support of 0.255 which was tested on 7 Mar and 13 Mar and both times it rebounded strongly from there. Whoever that bought at support today, thinking it will hold surely got exposed on the downside this time.

Hence a word of advice when one want to invest in the markets is, know what you are doing. Examine the company's background, etc and if you do not have a lot of money, better to buy the strong companies as even if their share price drop, it will recover as the fundamentals are always there to support it and overcome short term market aberrations.

This share is poised to go upwards if one has the patience to hold

The support price of Mudajaya is 2.50 - 2.59 and resistance at 2.83 level. The warrant 2 for 1 at 0.15 means that we have to pay .30 to get 2 warrants now and convert to shares at 2.60 = 2.90. Unless the share price can go beyond 2.90, which appears to be limited at this point in time, there is no reason to consider this warrant.

This share is a good medium to long term "bet" with momentary upsides and downsides that can be advantaged upon when one look at the charts. The Weekly charts shows that the trading band is between 2.50 to 2.83 which had been established since the week of 27/4/12.

Fundamentally, the company is doing very well with its ROE at 23.02%, in a cash rich position (Quick Ratio of about 1.6), low PE (8.32) and EV/EBITDA of 4.2. Dividend Yield of 4.31% is not exciting, however.

Currently the share lack "Buying" conviction and should return to test the recent support of 2.59 which on 29 Jan 14, rebounded from the low with relatively higher volume of 2.635 Million shares, with no follow thru selling.

The current follow thru from 29/1 on low volume was not encouraging however as it shows that only Retailers were buying and this cannot be sustained for a strong rebound. For now, it appears that the previous support of 2.59 will be tested again and if the rebound this time is accompanied by strong "Buy"volume like what happened between 4/10 to 21/10, a sustainable rebound is a possibility.

Caution :

If the immediate support of 2.59 cannot hold, the sell down will be short lived as can be observed in previous episodes of such breakdown of the 2.59 level between 20/6/13 and 15/7/13 and 22/8/13 to 9/9/13. "Value" investors were seen to enter and mop up the shares when the share fell at both periods.

Unless there are unforeseen circumstances, for example, more problems at its Indian project, or negative Emerging Market related news, the share should be supported at the 2.59 level. If that price level fails as a support, a return to 2.50 is a possibility if accompanied by strong "Sell" volume.

Upsides :

If positive newsflow comes on stream as mentioned, a breakout of the 2.83 level is a possibility and the share should then trade above 3.00 and possibly forming another trading band at a higher level than what it is currently.

We have provided the Daily & Weekly Charts as at the end of today, 14 Feb 14 in the Technical Analysis section of the website, www.kiasutrader.com.

Comments above are about Mudajaya

This share is a good medium to long term "bet" with momentary upsides and downsides that can be advantaged upon when one look at the charts. The Weekly charts shows that the trading band is between 2.50 to 2.83 which had been established since the week of 27/4/12.

Fundamentally, the company is doing very well with its ROE at 23.02%, in a cash rich position (Quick Ratio of about 1.6), low PE (8.32) and EV/EBITDA of 4.2. Dividend Yield of 4.31% is not exciting, however.

Currently the share lack "Buying" conviction and should return to test the recent support of 2.59 which on 29 Jan 14, rebounded from the low with relatively higher volume of 2.635 Million shares, with no follow thru selling.

The current follow thru from 29/1 on low volume was not encouraging however as it shows that only Retailers were buying and this cannot be sustained for a strong rebound. For now, it appears that the previous support of 2.59 will be tested again and if the rebound this time is accompanied by strong "Buy"volume like what happened between 4/10 to 21/10, a sustainable rebound is a possibility.

Caution :

If the immediate support of 2.59 cannot hold, the sell down will be short lived as can be observed in previous episodes of such breakdown of the 2.59 level between 20/6/13 and 15/7/13 and 22/8/13 to 9/9/13. "Value" investors were seen to enter and mop up the shares when the share fell at both periods.

Unless there are unforeseen circumstances, for example, more problems at its Indian project, or negative Emerging Market related news, the share should be supported at the 2.59 level. If that price level fails as a support, a return to 2.50 is a possibility if accompanied by strong "Sell" volume.

Upsides :

If positive newsflow comes on stream as mentioned by Mr Koon, a breakout of the 2.83 level is a possibility and the share should then trade above 3.00 and possibly forming another trading band at a higher level than what it is currently.

We have provided the Daily & Weekly Charts as at the end of today, 14 Feb 14 in the Technical Analysis section of the website, www.kiasutrader.com.

India is already doing something with the new Central Bank Governor raising rates. See : http://www.bloomberg.com/news/2013-09-20/india-unexpectedly-raises-rate-as-cash-curbs-eased-on-rupee-gain.html. This may help the Indian economy in the near term.

Malaysia is still in doldrums as there is a lack of immediate measures that can be effectively taken to overcome the deficits.

The coming declaration of total Government debt to include Government Guarantees on top of the Government Bonds to provide a better picture of overall indebtedness will show that the amount of debt and potential debt (guarantees) will be more than 55% of GDP and that is where the danger lies.

Capital moves quickly these days because of perception and Governments in emerging Markets react rather than anticipate which is why the moves can be drastic and knee jerk reactions are the order of the day.

Possible return to support at 0.065, selling is taking over as people who got in earlier are exiting in line with the rest of the market. Flight to safety is what is happening now.