Tuesday, June 23, 2009

KLSE:KNM 090623

Stock market is exciting again ... :)

Observe below that on 8 June, all the big guys are dumping KNM ... guess what ?

8 June also marks the END of KNM up trend which has been going up since March. Then the trend finally broke the support line on 15 June and trumbling down. Why do you think they bulk sell on that day ?

The next support line is 0.75 as shown above supporting by 7, 18 and 22 May. This support line is actually touched TODAY at 11am ( see below ) and instead of breaking it, it bounced back all the way to 0.825, that is 10% jump in a day.

Because of this sudden 10% jump, Stochastic 14-3-3 shows a Buy signal by EOD. The signal will be stronger if it also cross above the 20% line tomorrow.

MACD 26-12 however did not react. Half day rebounce does NOT really show a True rebounce. So it may take a few more up days to see effect in MACD.

On the other hand, if 0.75 is really broken, the next support line seems to be at 0.55 which is a 27% drop.

The ceiling is 0.95, also a 27% raise. A 50-50 win-lose ration is kind of a 'good bet' for speculators, thats why strong rebounce is observed today at 0.75

Speculation wise, what to do now ?

bought some today : Keep and wait for 0.95 ceiling, but also keep a trailing profit at -3%.
haven't bought yet: You still can get in below 0.84 for this short term speculation

Long term investment wise, don't forget KNM is worth buying below MYR 1.10 and it should give you 15% compound return for the next 10 years where its price will hit above MYR 2.00 during next10 years period.

KNM is one of the very few financially very sound businesses but with a lot of fishy smell ( see 1st paragraph above ). Its one of the few golden reference points if a financially sound business can make it or will it flop like some developed country's business. However, as long as Petroleum is in demand, I don't forsee KNM turns into Oilcorp in any near future.