Posted by kiasutrader1 > 2014-02-14 22:26 | Report Abuse

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.

Posted by johnny cash > 2014-02-14 23:11 | Report Abuse

thanks kiasutrader