Tuesday, March 8, 2011

Proton Shares Are Extremely Oversold But No Respite Yet.

Proton, after recording 6 consecutive profitable quarters, Proton announced an ugly 3Q11 net loss of RM60m on 25 Feb (2Q11 profit: RM65.9m; 3Q10 profit: RM79.7m) due to lower domestic sales volume, higher promotional expenses and branding costs coupled with restructuring expenses incurred in Lotus Group.

Since then, share price has tumbled 21% (-37% from 52-week high of RM5.03) to close at RM3.18 yesterday, violated its key short and medium term supports such as 50% FR and 38.2% FR. The correction was steep and price even breached the lower Bollinger band (RM3.24).

Looking at the charts, there is a high possibility that price may swing towards the RM3.00 important psychological levels and RM2.91 (61.8% FR – weekly chart) before staging a technical rebound. There are still no sign of positive convergence signals
as MACD histogram bars continues to head south despite extremely oversold slow Stochastics and RSI readings.

Risk takers may start to nibble when price approaches the RM2.90-3.00 territory to ride the technical rebound wave. However, be quick to cut loss if price falls below RM2.91. Technical rebound targets are RM3.31 (50% FR) and RM3.71 (38.2% FR).

Proton Shares Are Extremely Oversold But No Respite Yet.
proton 08-03-2011

Proton Weekly Chart May See Mild Rebound Once Hitting RM2.90-RM3.00 Zones.
proton 08-03-2011a

Source: HLeBroking

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