Technical Analysis Of Malaysian Stocks : Jan 8 - Jan 12 2018

So, how have you been doing at the start of 2018?

For many Malaysians, they have seen their portfolio grew quite a lot as the Bursa KLSE index started a rebound from mid December 2017 to January 2018.

If you are still not profitable, I highly recommend you to read this article I have specially written for you and my Malaysian friends. How To Make Money In Malaysian Stocks Using 1 Stunning Pattern.

I have stated in my analysis of the KLCI in the Telegram Group that the main Malaysian index is trying to breakout of a monthly long term triangle. If the momentum continues, we are likely to see the index challenge the former highs of 1890 area.

If I have time, I'll write an in depth analysis of the KLCI index.

But for now, let us look at some technical analysis of Malaysian stocks. Most of them are requests from fellow Malaysian investors and traders. Some are just hot stocks on the radar. I think it is better to put them in one place for easy reference as sometimes it's a bit hard to look for those charts in the Telegram group.

List Of Stocks

Here is a list of Malaysian stocks that I have analyzed this week. More will be added. If you want me to look at some stocks, shoot me a question in the Telegram Group. If I have time, I will look at them. (I trade US stocks, so can be quite busy with them).

  • HeveaBoard
  • Ekovest
  • Kronologi Asia
  • Malaysia Resources Corporation
  • VS Industry
  • MMS Ventures
  • Sapura Energy
  • Press Metal
  • Hengyuan
  • Inari
  • UMWOG
  • Sino Hua An

Always remember, Fundamental Analysis if for stock selection, but Technical Analysis is for market timing. In the stock market, timing is extremely important. If you can combine the both, its even better!

Technical Analysis Of HeveaBoard

HeveaBoard as I look at it is still in a nasty downtrend.

By analyzing this stock, it brings back all the lessons that I learned in the past of how a stock breaks down. The more I analyze stocks for my friends the more I learn about how a stock breaks down as well.

I have annotated the lessons below in the chart along with my analysis.

The chart above is the daily chart of Heveaboard.

A drop from 1.70 to 1.10 is really a very nasty drop. But the signs of a bear move were all there. First, the stock broke an uptrend line. This is usually a big sign that the trend has changed.

Secondly the stock also formed a descending triangle and broke down.

As the stock cross back below the 50 MA, it started to have a waterfall move down.

Right now the stock is slowly drifting lower. You could actually say that HeveaBoard is forming a descending triangle. Usually this is not a very good sign for a stock. A descending triangle works the opposite of an ascending triangle. Stocks often continue to go down when there is a descending triangle present.

The chart above is the weekly chart of HeveaBoard.

The double top in the weekly chart was mainly responsible for the massive drop. Together with the analysis in the daily chart I think most seasoned traders would have been able to spot the drop.

Currently the stock has declined to an area of long term support.

Long term support are areas that are suppose to be able to keep the stock from dropping. I think the fact that there is a descending triangle forming in the daily chart is a sign that the bears are taking a lot of effort to fight the bulls.

The 1.10 area will be crucial as it is a long term support area.

Although the stock is near long term support I still think that it is a bit risky to bottom fish right now. The stock has not shown that it is willing to stop dropping in the daily chart. Perhaps if it can go back above the daily 20 MA and 50 MA and form some kind of a bottoming pattern, then only shall we attempt to purchase this stock for a trade or investment.

Technical Analysis Of Ekovest

In analyzing Ekovest, I will take you on a tour of the monthly chart, weekly chart and daily chart.

I wanted to know why Ekovest shot up so much recently. So usually I will try to find a technical catalyst in the longer time frames such as the weekly chart and the monthly.

When I look at the monthly chart, I found the answers.

The chart above is the monthly chart of Ekovest.

We can see why the stock bounced up recently. Ekovest was declining to its monthly long term support. That is also where it met its monthly rising 20 MA.

The chart above is the weekly chart of Ekovest.

The stock actually broke above a weekly downtrendline. This is usually one of the characteristics of a trend change. However, when I look at the massive amount of resistance on the left, I can only imagine the amount of time that will be needed to absorb the supply there.

Therefore, even if the stock goes back up in the daily chart, it will encounter quite a lot of resistance as it moves up.

The chart above is the daily chart of Ekovest.

As the stock reaches the monthly long term support, the daily chart was forming a variation of the ascending triangle. When you combine the long term support with a bullish reversal pattern such as the ascending triangle, it was a recipe to send the stock higher in the short term.

The daily chart will enable you to see that there is actually quite a lot of pocket of resistance. Therefore, I would prefer to see Ekovest consolidate as it moves higher. Traders can buy the breakout of the consolidation (if it materializes).

Technical Analysis Of Kronologi

Kronologi Asia is one of those wonder stocks that shot up rapidly in 2017. Then it collapsed and is now hovering at a support area. I actually did a write up on Kronologi titled Chart Lessons From Kronologi, The Stock That Soared More Than 100% In 2 Months

The chart above is the weekly chart of Kronologi.

It's getting a bit oversold and it is now sitting at support. The question is, will it be able to rise up again?

We need to look at the daily chart for a clearer picture. At this moment the 0.90 area is the support area. I still do not see a change in trend in the stock. The 200 MA is rising and about to meet the stock price.

So this is some good news for bulls as it may help to support the stock and make it bounce back up again.

The stock is still in a daily downtrend and I would like to see it trade back above its daily 20 MA. Hopefully it will form some bullish reversal pattern as it meets the 200 MA.

Technical Analysis Of Malaysia Resources Corporation MRCB

Malaysia Resources Corporation is a stock that has recently made a bottom and started a new uptrend in the daily chart.

If you look at the daily chart above, you will see that from October 2017 to early 2018, the stock has been making higher highs and higher lows. This is a characteristic of an uptrend.

The stock has also broken out of an ascending triangle in December 2017 and the pattern's short term target is met. Currently, the stock is trading at a resistance area.

I have circled the resistance area on the left. This needs some time to overcome.

Therefore, I expect the stock to have some correction or at least trade sideways.

How do you tackle this stock?

If a stock has start to make a new uptrend, the way to trade it is to buy the dips or buy the breakouts. The recent trade pattern breakout is the ascending triangle.

I'm not sure what pattern might form in the near future. But if the stock dips to an area of support or the 50 MA, we could try to find a bullish reversal trade. Or if any continuation pattern forms, we can buy the breakout.

If you ask me whether this stock is suited for trading or investing, I would say for individuals, it is better to trade this stock because of the layers of resistance above and in the weekly charts.

Technical Analysis Of VS Industry

VS Industry is one of those stocks that is being watched by everyone for a breakout.

With a flat top with same highs and the stock recently making a higher low and shooting up to the old highs, it is no wonder that most traders, investors and analyst are expecting a breakout.

The chart above is the daily chart of VS Industry.

The stock has had a very nice run up and the current sideways consolidation can be considered a period of rest before the stock breaks out.

I'm not very sure if you can call this pattern an ascending triangle. But one thing you will notice is that the stock has shown some willingness to make a higher low. Stocks that are about to breakout higher often exhibit this kind of pattern. Making higher lows tells us that the stock is refusing to go lower.

With such a nice horizontal top, we can expect the stock to shoot higher if it can break decisively above the 3.17 to 3.18 area.

If you look at the weekly chart of VS Industry above, there is evidence to expect a breakout.

The stock is almost touching the rising weekly 20 MA. If you look at the chart history of this stock, it has shown us that it likes to break out when it touches the rising weekly 20 MA. So, perhaps history might repeat itself this time.

Since this is a breakout play, I would advice you to put an alarm on the stock.

Technical Analysis Of MMS Ventures

MMS Ventures was a very hot stock back in 2017 until it had a nasty correction.

In this analysis of MMS Ventures, I will put the daily chart and the weekly chart side by side for comparison. The daily chart will be on the left and the weekly chart will be on the right.

The recent rise in the daily chart happened because of the oversold stochastics in the weekly charts. This provided a catalyst for the stock to be traded in the daily time frame.

In the daily time frame, the stock formed a bullish divergence double bottom. Some may see an ascending triangle forming as the stock bottomed in the daily chart.

Usually stocks that have this bottom can shoot up high quite fast but the slow grinding up in MMS Ventures is because of the stubborn resistance which you can see in the daily chart. That will take some time to be absorbed.

Anyway, I will stay bullish on this stock if it can manage to stay above 1.70 area.

Which is just slightly below the top of the daily ascending triangle. Furthermore, the weekly chart is probably forming a bullish MACD buy signal, so if MMSV can stay above 1.70 then we should be bullish bias.

Technical Analysis Of Sapura Energy

The oil and gas sector seems to have taken the Malaysian stock market by storm. With rising oil prices it is no wonder that these stocks are hot for trading.

Sapura Energy is one of those stocks that is in a serious daily downtrend. Again, I do not really recommend owning this kind of stocks. On the other hand, too much selling plus the bullish prospects in oil and gas stocks, especially overseas stocks, will usually provide a bullish catalyst for trading the stock.

This is a stock that I recommend trading but not investing in it.

For me, I still prefer to have people invest in strong uptrending stocks. Its easier to make money that way.

But anyway let's look at the technical analysis of this stock.

The drop from 1.40 to 0.70 was quite swift and this provided a tradeable void which allows astute short term traders to make some nice quick profits trading the oversold stock.

There are two significant areas to watch out for in the daily chart. The first one is the declining 50 MA which acts as a psychological barrier. And the second one is the price resistance which you can find at 1.40.

At this price of 0.975, if the stock manages to go up to even 1.30, it represents quite a lot of upside.

I think the best time to enter this stock was when it formed an ascending triangle in the 60 min chart. In order to determine whether this stock has firepower to move higher in the short term, let us zoom into the 60 min chart.

The chart above is the 60 min chart of Sapura Energy.

As you can see, the stock was trading below the declining 60 min 20 MA and 50 MA for a long time. Then the stock formed a 60 min ascending triangle bottom and traded back above the 20 MA and 50 MA. 

The breakout of the 60 min ascending triangle was a good time to enter.

So, now the question is this...

Will the stock continue to move higher?

Well, I believe it is possible for the stock to move higher as long as it stays above the 0.85 to 0.90 area. This is where it formed some kind of flag pattern.

I also like to use the rising 60 min 20 MA as a gauge. So, as long as the stock stays above the 0.85 to 0.90 area and stays above the rising 60 min 20 MA, there is a good possibility of it moving higher.

For short term traders, you should look for continuation patterns in the 60 min charts for entry.

Technical Analysis Of Press Metal

Press Metal is another very hot Malaysian stock at the moment. One of the reasons is because it is being added to the FBM KLCI index. The other stocks that is being added to the KLCI index is Nestle.

In the US, whenever a stock is added to the S&P 500, it is a huge event for the stock. Funds will gobble up the stock and many investors and traders will focus on the stock. Therefore, the price will jump up tremendously.

It is no different in Malaysia.

Whenever a stock is added to the main KLCI index, it is like an upgrade from Economy Class to First Class seat.

That makes the stock more valuable.

The chart above is the Daily Chart of Press Metal.

Here is the summary of the technical analysis of this stock:

  • The stock has broken out of 2 nice ascending triangles in the past
  • It is currently trying to break out of another ascending triangle
  • The stock is in a strong uptrend (staying above its rising 20 MA, 50 MA and 200 MA)

With such a strong technical picture and a possible ascending triangle breakout, we can be bullish bias on this stock. If the breakout is successful, the initial price target for this stock (using the ascending triangle target) will be around RM 6.50.

Since the stock is in a nice uptrend, the RM 6.50 is just a target. From my experience, stocks that make ascending triangle breakouts in an uptrend tend to be able to shoot up higher.

The chart above is the weekly chart of Press Metal.

This stock is really in a very strong uptrend. Notice that the stock is above its rising weekly 20 MA, 50 MA and 200 MA. The stock also stayed above its rising weekly 20 MA most of the time. Never falling below it at all since mid 2016.

This is a sign of strength and longer term investors should be bullish on this stock as long as it stays above the rising weekly 20 MA.

Technical Analysis Of Hengyuan Refining. Is A Top Happening In Hengyuan?

Hengyuan is also another widely followed hot stock in Malaysia. Mostly because of the interest of Malaysian tycoon Koon Yew Yin who recommends the stock and also because of the massive price rise in 2017.

The stock has more than doubled from RM 8.00 to RM 17 plus since November 2017.

The chart above is the daily chart of Hengyuan.

As you can see, the ascending triangle chart pattern seems to work very well with this stock in 2017. Every time the stock breaks out of the pattern, the stock shoots up higher.

The run up from December 2017 to January 2018 can almost be said "parabolic".

Is a top happening in Hengyuan?

Trading has been very volatile in the past few days. This makes investors and traders wonder if a top is happening in Hengyuan. Well, after a nice run up, it is not unusual to see volatile trading in a stock. 

Even in Bitcoin, we can see extremely volatile trading after a nice run up. All this is normal.

But for those who chased the stock and got in at RM 18.00 and above, it is still a pain for them.

Currently I do not see any weakness in the stock yet. It is still above its rising 20 MA and rising 50 MA. The other thing is, stocks that have a nice run up need some time to rest. As long as Hengyuan stays above the RM15.50 to RM 16.00 area, I'm not bearish on this stock.

What I would like to see is for the stock to form some kind of continuation pattern. Continuation patterns such as:

  • Ascending triangles
  • Consolidation boxes

will help the stock to take a rest before breaking out higher.

On the other hand, if the stock starts to drop below the RM 16.00 area and below its rising 20 MA and rising 50 MA, you need to be extra careful. If that happens, the stock might drop back to the support area around RM 11.00

Technical Analysis Of Inari Amertron

Another hot rising stock in Bursa, Inari Amertron had a nice bull run. Recently it broke out of 2 ascending triangles, which you can see on the chart.

In early January 2018, the stock broke out of a consolidation at support pattern. This stock is extremely bullish and since it is in an uptrend, we should continue to stay bullish as long as the stock is above the rising 20 MA and 50 MA.

Shorter term traders might want to look at the 60 min chart of Inari Amertron. Sometimes you can find lots of trading opportunities by zooming into the lower time frames.

As you can see from the chart above, the stock recently formed a 60 min ascending triangle and shot higher. I like to use the 60 min 20 MA and 50 MA to gauge the trend strength of a stock. Since Inari is still staying above the 60 min 20 MA, I will continue to be bullish on it short term.

If the stock drops below the 60 min 20 MA, you have to be a bit careful of it.

The daily chart is in a strong uptrend. So, any corrections or dips can be bought. Sometimes you can use the 60 min chart to find trading opportunities. You might even find 1 or 2 hourly ascending triangles to trade!

Technical Analysis Of UMW Oil And Gas Corporation

Recently a friend asked me to have a look at UMWOG.

The first thing that I noticed was that this stock is in a really really bad downtrend. Whether its in the daily or the weekly chart, its in a downtrend. Usually I recommend people to stay away from these kind of stocks.

If there is 100 other stocks that are in an uptrend, why do you want to play a stock that is a downtrend?

However, there is a silver lining in this stock for traders.

There is a nice consolidation box that was developing in this stock. And there was a tradeable void up to 0.65 area. So those who trade and buy this stock around 0.30 to 0.40 had an opportunity to double their profits!

So what I did was, I drew a nice consolidation box for my friends. 

I know that breakouts often happen when a stock trades above an area of consolidation. In the case of UMWOG, the stock shot higher when it broke above the box.

Even before that, the stock had already broken a downtrendline. Now, a downtrendline is a place where more aggressive traders could enter the stock. Usually you buy the stock as it breaks the downtrendline. If you manage to catch the breakout, it often gives you a nice risk reward in the trade.

Notice the heavy volume that I circled in the stock chart?

It goes to show that there are lots of people who are eyeing the stock for a breakout.

What the stock had just done is to try and start a new daily uptrend.

The stock has already broken out of a consolidation. The top of the consolidation box will now act as a support area. In the event that the stock corrects back to the top of the box, traders can often find buying oppotunities.

Now that the stock has run up quite a bit, I expect a slight resistance at 0.50 (which will most likely be easily overcome). Some consolidation or continuation pattern there will send it up to 0.65 which is a big resistance area.

In my opinion, traders should sell some of their position when such heavy resistance area is met. Then when another continuation pattern forms around 0.60 to 0.65 they should buy the breakout of the pattern.

Let's zoom in a bit to the 60 min chart of UMWOG.

As you can see, the stock shot up really well in the hourly chart. Almost parabolic I would say. What I usually like to do is to look at the rising 60 min 20 MA. This is a simple trend following method that often beats many techniques. As a short term trader, you should be bullish on the stock as long as it stays above the rising 60 min 20 MA.

Once the stock drops below the 20 MA, you should be a bit cautious and look for any sign of reversal or continuation. At this moment, UMWOG is still above its 60 min 20 MA, so I would continue to stay bullish short term.

How about the longer term picture?

The above is the weekly chart of UMWOG.

What a nasty downtrend. But that does not mean you can't profit from it. You can trade in and out of the stock but I do not recommend the buy and hold method for this kind of nasty downtrend.

There are layers of resistance above around 0.65 and also 1.00.

All these resistance will take a lot of time to overcome and the money that I could use to play a strong bullish uptrend stock could be lost waiting for the stock to overcome resistance. Therefore, trading would be a better approach for this stock.

Technical Analysis Of Sino Hua An International Bhd

The last stock I'm going to look at today is Sino Hua An.

This is also a very hot stock in the Malaysian stock market. Well part of the reason is because it broke out of a very big ascending triangle which help it to shoot higher.

The above is the daily chart of Sino Hua An.

If we take a measured move target, we can see that the stock has already met the target. So some caution is needed here.

Especially when you look at the monthly chart of Sino Hua An where it is now touching a resistance area, you should be careful. Now, that does not mean the stock will collapse. It just means that it might be a bit late to buy. Unless another continuation pattern appears in the stock.

Whenever a stock touches a resistance area, I usually like to see it consolidate a bit and form a continuation pattern. The consolidation or continuation pattern acts to absorb the supply from the resistance. Once the stock breaks out from the pattern, it will present a nice trading opportunity for the trader.

And of course, there are plenty of trading opportunities for short term traders. Traders who like to buy and hold for 2-5 days can find ample trading opportunities using the ascending triangle in Malaysian stocks.

The chart above shows the 60 min chart of Sino Hua An. Recently there were 2 ascending triangles that develop in this stock. The first one was a very successful one. The second one is still in the process of the trade.

For now, as we look at the 60 min chart, I would stay bullish in this stock as long as it is above the rising 20 MA and 50 MA. It's just a simple trend following method I like to use. If the stock drops below the rising 20 MA, I would be cautious and if it drops below the 50 MA, then usually the short term trend is over.

Conclusion

Although I trade primarily US stocks, I still find it beneficial to analyze Malaysian stocks and help my friends out. To be honest, chart patterns appear again and again in stocks all over the world.

I always believe that if you can make money in one market, you can make money in all markets.

I also hope that the simple analysis here have opened your eyes to the tremendous money making opportunities you can find in the Malaysian stock market.

If you find this helpful, do share it with your friends. If you have a friend who holds the above stocks, perhaps you can also refer them to these analysis.

Have a great trading and investing week ahead!

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