After meandering from 0.90 to 1.30 for so many years this stock has been quite a disappointment for those who wished that it will go up along with the rest of the market. What is MRCB going to do? Will it even break higher?
Malaysian Resources Corporation is one of those stock which if you have invested in 2015, you still have not made that much money on it. Well I suppose its better than losing 50% of your investments.
I've already discuss about the long term outlook of MRCB in the past so I won't go into that again as the longer term charts are the same and will take some time to develop. So today I will only look at the daily chart and the 60 min chart of MRCB.
The chart above shows the daily chart of MRCB. As we can see, the stock managed to find support at the area I highlighted in the past analysis. This kind of stocks can really drive investors crazy but for the astute trader, it still offers quite a number of trades where they can profit from it.
One of the ways to play Malaysian stocks is the ascending triangle which I showed you guys in the past. And another one which I showed you in my analysis of FGVH is the break downtrend line. Sometimes trades are as easy as drawing a line and buying the stock when it trades above the downtrendline.
But you need to make sure that the stocks is breaking above the downtrendline as it hits a support area. MRCB provided one back in Nov 2017. The recent one was a break above a steep downtrendline but I think only very brave and experienced traders would have seen it.
If the stock is at support and it breaks above a downtrend line then that is usually a sign to buy the stock for a swing trade. The stock is currently trying to break above another bigger downtrend line. This will provide less reward to risk ratio but if the stock can move above this downtrend line then it is possible to shoot up higher.
If it can't break above the downtrendline. some meandering in the stock price will happen.
Looking at the 60 min chart above, you can see how the stock gave traders a nice trade. See how it broke a downtrend line and then produced a 60 min ascending triangle for short term traders. The trade has already happened. Traders can enter as the stock break above the highs of the pattern and put a stop loss below the uptrendline of the pattern depending on how aggressive one wants to be.
At this moment, since the stock is above its rising 60 min 50 MA, we should remain bullish bias. Perhaps it might just break above the daily downtrendline.
Much has happened to MRCB since the last time I look at it.
I wish I have lots of time available so that I can update each stocks everyday but that is impossible. Important technical developments happen when I am unable to look at the stock. So, I hope you treat the analysis here as a supplement and not the main diet to your analysis.
The chart above is the daily chart of MRCB.
Due to the weaknesses in the Malaysian market, the stock suffered a sell off today. However, it is dropping to an area of support and also the uptrend line support as well as the rising 50 MA. It will be crucial for MRCB to stay above this support area.
If it can, then it will be able to go back higher as the current drop will be nothing more than a correction. On the other hand, if the support cannot hold, then we will be in for quite a bit of selling in MRCB.
We will start the dissection of MRCB by looking at the monthly chart of the stock.
As you can see above, the stock has not been moving that much since 2015. Actually you could say it has been trading sideways since 2013.
We could draw two lines to connect the tops and bottoms of the monthly chart. You will be able to see that it is making a monthly triangle. So as the stock reaches the apex of the triangle, usually we can expect something significant to happen. Either it will break higher or lower.
But do remember this is a monthly chart. So many people will fall asleep before it happens.
Nothing much has changed since my last analysis.
It is still trading sideways trying to absorb the supply areas I have circled on the left. Right now it is trading above the support area so we can still say that the newly started daily uptrend is still intact.
What I do continue to expect is more sideways trading. If it can form a box and breakout above, it will move higher. Because of the amount of resistance overhead, I expect the movement to be up then down then up (if it breaks out).
The move up will grind higher instead of smooth sailing like other stocks that do not have that much resistance.
Let's take a look at the 60 min chart for more accurate anticipation.
Recently the stock found support at the rising 60 min 200 MA and price support. It also broke above a 60 min downtrend line which is something good. We can expect the stock to go higher if it can stay above the downtrend line and the price area of 1.20.
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.
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