It is a mixed trading day, with good gain for many blue chip stocks but listless trading for many 2nd & 3rd liners. FBM-KLCI gained 9.27 points to close at 1329.84. It surpassed the closing high of 1328.22 recorded on March 10 but a bit short of the intra-day high of 1334.34 recorded on March 11. Despite the handsome gain in the main market barometer, the overall market was mixed with gainers edging out losers by only 4 to 3.

For the past few days, there has been very little worth posting on the blog. Even today, there was little to look at. For example, MISC chalked up a gain of 33 sen to close at RM8.43 on volume of 11364 board lots. It made an intra-day high of RM8.50. MISC's latest results for 9-month ended 31/12/2009 was fairly disappointing with net profit dropping from RM1.22 billion to RM486 million while turnover dropped from RM11.78 billion to RM10.47 billion. What could have sparked the strong rally in MISC? Chartwise, MISC seems to be forming a Head-&-Shoulders formation with the neckline support at RM7.30-40 (see Chart 1). I expect fairly strong resistance from the 30-month SMA line at RM8.51-52. Best to watch this stock from the sideline for now.


Chart 1: MISC's monthly chart as at Mar 1, 2010 (Source: Tradesignum)

Another stock that looked promising at first glance was ATIS. From Chart 2, it appears that ATIS may have broken above its long-term downtrend line at RM1.25. The chart of its last 12 quarterly results (Chart 3) shows a sharp rise in net profit & turnover for the past 2 quarters. However, the increase in net profit for these 2 quarters are attributable to one-off events, i.e. negative goodwill arising from the acquisition of Mutiara Goodyear of RM23.5 million (for QE31/12/2009) & exceptional gain on disposal of 16% equity in KVC of RM14.4 million (for QE30/9/2009). If these items are excluded, ATIS's financial performance has in fact deteriorated. As such, the present rally in the share price is somewhat surprising. Better to avoid ATIS.


Chart 2: ATIS's monthly chart as at Mar 1, 2010 (Source: Tradesignum)


Chart 3: ATIS's last 12 quarterly results


Table: ATIS's last 8 quarterly results

If you are wondering whether this post is a waste of our time, I shall leave you now with one promising stock to watch out for. IJM (closed at RM4.94) appears to have broken above its flag formation at RM4.90 today. With this breakout, IJM may continue on its prior uptrend. Its next resistance is its recent high & the psychological level of RM5.00.


Chart 4: IJM's daily chart as at Mar 31, 2010 (Source: Tradesignum)

For those who like a leverage play on IJM's potential upside move, you may consider its recently-issued warrant, IJM-wc. IJM-wc is a 5-year warrant expiring in October 2014 & convertible to share on a 1-for-1 basis at a price of RM4.00. IJM-wc (closed at RM1.17) has a premium of only 4.7%.


Chart 5: IJM-wc's daily chart as at Apr 1, 2010 (Source: Quickcharts)

Happy trading!!!