You can also click in this link to my blogspot. Thank you.

The month of October had not been too generous for us as investors, even though this is our Budget month. The opening index in October is 1,658.36 and closes at 1672.46, it moves up 0.85%. And in the coming month, November will be a critical month for the US Presidential Election. And for us in Malaysia, will the windows dressing happening again in this year end? 

In this post, we will talk about a few companies which had posted a not so profitable Quarter Result and the share price dropped immediately in the following day. What happened in the second day (T+2)? But before that, this post is just a case study, this is not a post to urge you to catch the falling knife. Do not be a HERO if you are not well trained or well prepared...

The possible reasons that trigger the investors to panic sell, therefore the share price drop drastically are:

1. Something happened to the Management Team;

2. The Quarterly Result is not as good as expected.

Mostly the share price will be falling down on the next day and it will continue to fall even more. And of course, there are always HEROs who are brave enough to catch the falling knife. But can we be one of them? Or we might not have the correct timing, ended up, we hurt ourselves. Thus, there are a lot of ZEROes who failed to act in the way they supposed to act. 

Just some reminders for you and me. Something for us to ponder before we try to be a HERO. If we:

1. Do not have enough time to monitor the stock;

2. Are not so good in TA and charts;

3. Do not have much confidence to operate;

4. Are afraid of losing money;

Then, DO NOT try to be a HERO. There are 950 stocks in our Malaysia Market, why bother those few counters? Of course, if you have a strategy on operating those counters, you must also respect your strategy. Remember, the reason you sell is the reason you buy. Or else, let's keep it simple, please avoid the falling knives.

In the month of October 2016, i notice that there are a few counters announced below expectation's QR. Let's go through those examples.

1. FIBON

On 26 October 2016, FIBON announced its Q1 result. 

FIBON Q1 2016 Result

Revenue slight increase YOY +5%, QOQ -26%. Net profit decrease YOY -127%, QOQ -55%. 
Lets look at the chart.

FIBON

On the next day (27 October), the share price gapped down and opened -6.6%. Look at the volume, the volume is quite huge on that day. For sure there are some panic sell and some heroes there. In the end, the candle formed a hammer, by right, in TA  (Technical Analysis) terms, a hammer is a reversal pattern. But when we look at the angle of FA (Fundamental Analysis), its revenue and net profit dropped. In terms of PA (Projection Analysis), this signifies a weak quarter and most probably in the next coming quarters will be having weak quarters as well.

In the next few days, it continue to drop. However the chart had now entered a oversold zone, ready to rebound anytime. 

2. HOMERIZ

On 27 October 2016, HOMERIZ announced its Q4 result. 

HOMERIZ Q4 2016 Result

Revenue decreases YOY -12%, QOQ -19%. Net profit decrease YOY -45%, QOQ -41%. 
Lets look at the chart.

HOMERIZ

On the next day (28 October), the share price gapped down and opened -4.7%. Again, look at the volume, the volume is huge too. The candle also formed a hammer but in the next few days, it continue to drop. Now the chart seems like forming a bullish harami.

3. NYLEX

NYLEX Q1 2017 Result

NYLEX

4. PENSONI

On 27 October 2016, PENSONI announced its Q1 result. 

PENSONI Q1 2017 Result

Revenue decreases YOY -12%, QOQ -17%. Net profit decrease YOY -66%, QOQ -234%. 

PENSONI

On 28 October, the share price gapped down and dived opened -5.4%. Look at the volume, a lot of transaction had been transacted. The candle formed a hammer but in the next few days, it continued to drop. The revenue and net profit actually dropped a lot, which is not a good sign. The share price had been in oversold position for a few days, technically it will rebound soon.

5. GADANG

On 27 October 2016, GADANG announced its Q1 result. 

GADANG Q1 2017 Result

Revenue decreases YOY -43%, QOQ -138%. Net profit decrease YOY -47%, QOQ -83%. 

GADANG

On 28 October, the share price gapped down and dived opened -8.8%. Look at the volume, a sky high of transactions. The candle formed a hammer but in the next few days, it continued to drop. Today the candle showed a bullish engulfing, maybe GADANG is ready to rebound.

6. 3A

Snapshot from The Edge Financial Daily dated 26 October 2016[1]

3A

7. SUPERMX

From the Star[2]

SUPERMX

Summary: