LMCement has surpassed its all-time high of RM6.80 (recorded in 1993) this morning. For most part of 2009 & early 2010, LMCement was trading above the resistance, RR, and traded in the range between RM6.00 & RM6.50 [see Chart 1]. Yesterday, LMCement broke above that trading range to close at RM6.55 [see Chart 2]. These breakouts (of the trading range & the all-time high) means that LMCement is likely to continue with its prior uptrend. However, there were two past occasions where LMCement made a high higher than the most recent high before it faltered, reversed & entered into a bear market. This happened in 1996-97 (denoted as 'a' & 'a1') & again in 2007-08 (denoted as 'b' & 'b1'). If LMCement were to drop below the most recent high of RM6.63 recorded in August 2009 (denoted as 'c'), then the probability is high that the stock could have reversed. That's the negative scenario which may or may not pan out. For now, LMCement could be a trading BUY for those with high risk tolerance.


Chart 1: LMCement's monthly chart as at Apr 1, 2010(Source: Tradesignum)


Chart 2: LMCement's daily chart as at Apr 6, 2010(Source: Quickcharts)

Note: For FYE31/12/2009, LMCement reported a net profit of RM412 million on a turnover of RM2.483 billion. based on its 2009 EPS of 48.5 sen, LMCement is now trading at a PER of 14 times (based on current price of RM6.80). At this multiple, LMCement's upside is fairly limited.