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Technical Analysis Of Nestle Malaysia Stock

What is Nestle Malaysia's stock doing? Here we take a look at the trends and technicals of this stocks.

Learn what Nestle is likely to do in this analysis.

15 March 2018 (Thursday)

Wow it has been more than a month since we last look at Nestle Malaysia. A friend messaged me today and asked me to take a look at the stock. When I look at the stock chart, I understand why this stock has been on the lips of many Malaysians.

When I first covered this stock, the price was 107.

It hit a top of 163. About 60% rise from 107. What has been a reliable blue chip company for investment purposes has turned out to be a speculative venture as the stock price rises in a parabolic way.

The chart above is the daily chart of Nestle Malaysia.

As you can see, the stock had an unusual volume day back in November 2017, thanks to the fact that it is being added to the KLCI. Whenever a stock is added to a country's main index, it will be the focus or many investors.

The unusual volume coupled with the fact that it broke out of a trading range help to set up what I call a "breakout above consolidation" pattern.

Notice also how the stock was trending above its rising 50 MA and rising 200 MA. The stock was also making an all time high. All these was the necessary ingredient for a nice super bullish trend trade which you can learn in the recent guide I have written. "A Beginner's Guide To Trend Trading". 

In this guide I will show you how to spot some of the best stocks to buy for trend trading. After reading it, you will understand why Nestle had a super nice run up. Do take some time to learn about it as there will be plenty of Nestle's in the future. And you want to be ready to take action when that happens.

I have highlighted the green area as a place where Nestle was trending up nicely. However, it soon entered into a parabolic state which I have highlighted as the red area.

At this moment, the stock is at a support area. It is important for you to watch this support area carefully. If the stock manages to stay above this area and stabilize, then the correction will end and the stock might rise again.

If it drops below this support area, then you have to be really careful as more selling might happen.

Whenever a stock goes up in a parabolic way, you need to switch to a smaller time frame such as the 60 min chart to get a sell signal.

Do remember that fast run ups are usually not sustainable. Don't kid yourself. What goes up fast will go down fast as well. Easy come easy go.

You just have to look at what happen to the Dow Jones back in late January, early February 2018.

When a stock is rising in a parabolic way, these are great times to find continuation patterns to play for short term trades. I have highlighted many of these short term buy setups in the chart above.

They are setups such as box breakouts and ascending triangle. All these happen in the 60 min chart and are usually only spotted by professionals as most amateur investos or traders seldom do multiple time frame analysis.

There were a few signs that the stock was topping out and those who have some experience and those who follow my work closely will be able to spot it:

  1. Stock had a 60 min topping tail
  2. Stock formed an "Angry Bird" pattern. How To Spot A Top In Your Stocks Using The Angry Bird
  3. Stock dropped below the rising 60 min 20 MA

With regards to the Angry Bird pattern, usually you can see it in the daily chart. But you should not ignore it when it forms in the 60 min chart as well.

At this moment, the stock is still staying above its rising 60 min 200 MA. That is at least encouraging. But be careful if it drops below the 60 min 200 MA. Also, the green area I have highlighted is a support. If the stock can stabilize at this area, then it will be good. Be careful if it drops below this support area as more selling might happen.

Since Nestle is part of the KLCI, you need to look at the KLCI as well.

Right now, the KLCI is sitting at an uptrend line. It may be forming a triangle as well. If KLCI can find support at the uptrend line and also stay above the rising 50 MA, then it is very likely that the support in Nestle will hold. If KLCI drops below this uptrend line then Nestle might also follow it lower.

Hope this helps,

Happy trading and investing!

Technical Analysis Of Nestle Malaysia (February 2 2018)

Nestle Malaysia stock is one of those reliable stocks that have been chugging up slowly giving investors a massive return over the years. Usually retail investors are all over hot tech stocks, glove stocks, oil stocks and other stocks that are blown by the winds of rumors, contracts and politics.

But many forgot that the trusty Nestle Malaysia has gone up almost 500% since a decade ago.

Nothing much to analyze here. But I was looking at the chart of Nestle and saw that it has met its daily measured move target today. Measured moves are just a target. Sometimes the stock may just continue to move up but the observant investors will also be on the lookout for any consolidation or correction.

Technical Analysis Of Nestle Malaysia (January 30 2018)

One of the beneficiaries of the rise in KLCI is Nestle. It is very common for stocks within an index to rise when the main index rises. Actually, I would say that it is Nestle and Press Metal (both recently added to the KLCI) that is helping KLCI go higher.

If only Malaysia follow more in the footsteps of the guardians of the S&P 500 and Dow to change their components more frequently. Bring in the good stocks and throw out the bad ones.

Then the Malaysian index would have hit record highs sooner.

Nestle Malaysia's stock has gone up quite a bit since my last analysis of this stock. The chart above is the daily chart of Nestle.

It broke out of a consolidation box and is now almost reaching the measured move target. A measured move target is just a target to help investors be realistic of a stock's potential move.

Since the stock is in an uptrend, it is common for the stock to rise even more than the initial target. Sometimes they may fall short of the target by a bit.

To help you gauge the short term trend, investors can switch to the 60 min chart of Nestle.

I usually use the 60 min 20 MA and 50 MA. As long as the stock stays above the rising 20 MA and 50 MA, I usually remain bullish with the stock. When it falls below each one, I start to be more cautious.

Technical Analysis Of Nestle Malaysia (January 18 2018)

The chart above is the monthly chart of Nestle. It has been in a long long uptrend since 2007. Along the way there were dips here and there but for the investor it was a buying opportunity.

This stock reminds me of the US stock Walmart that has been rewarding the patient investor for decades. Sure there were corrections but the patient investor who sticks with a stable company will eventually be richly rewarded.

The stock even had a monthly ascending triangle developing back in 2013 to 2015. This goes to show that chart patterns can appear in any time frame. Since it appeared in a long term chart, they were perfect entry points for big funds and long term investors.

The chart above is the daily chart of Nestle.

The stock had been chugging up slowly but in October 2017, it started to have a rapid shoot up. The presence of strong volume might hint to more upside for this stock.

Nestle Malaysia has now been added to the FBM KLCI index and hopefully its continuous uptrend will help boost the local index.

Recently Nestle broke out of a consolidation box. 

This is something very positive as it gives us a reference point to look at. Those who are invested in Nestle Malaysia should continue to be bullish on this stock as long as it can stay above the box. The price area of support would be RM 97.50 to RM 102.50 area.

The rising 50 MA and 200 MA which are widely watched by fund managers and long term investors are in a very healthy upward slope.

Nestle has truly been a remarkable blue chip stock.

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