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Sunday, December 26, 2010

Keck Seng - In Strong Cash Flow & Financial Position, Slow & Steady Uptrend

Chart: KSeng daily chart (Source: tradeSignum)


Fundamental Review & Outlook
Keck Seng is involved in the cultivation of oil palm, Cocoa, processing and marketing of refined palm oil products, housing development, property investment and investment holding. The main factor for the recent huge income growth was due to the share disposal of its entire shareholdings of 35.58m shares in Parkway Holdings Ltd with a gain of RM260.14m. KSeng has became one of the Cash Rich company with the one-time gain income. KSeng is maintaining a slow but steady growth in the last few quarters. The company's 1-for-2 bonus issue plan is anticipated to be completed in the 1st quarter 2011.

Technical Review & Outlook
KSeng is in a steady uptrend with the supports of bullish technical data. The stock hit the record high last week with low volume transacted. It looks a bit tired and needs more convincing news to push the price higher. Otherwise, it may fall into consolidation mode and may have a pause in the bull run. The current bullish news are high CPO price, bonus issue plan, and healthy financial position.

Technical Indicators
Volume: Stock price needs further buying support to breakthough RM6.80 main resistance.
MACD: Bullish, after golden cross being constructed in early Dec 2010.
RSI: Bullish, hovering at 70 level.
EMA50, 100, 200: Bullish, as long as it stays above all these lines.
Bollinger Bands: Bullish, above mid-line.

Support level
RM6.50, RM6.25.

Resistance level
RM6.80

Risk
1. Slow down in revenue and profit due to the disposal of healthcare business.
2. Commodities prices like CPO retreated with global demand reduce and higher productivity in 2H 2011.

Near-term outlook (30-90days)
Consolidation mode after sharp gain last week.

Long-term outlook (6-12months)
Bullish, in long term uptrend, buy on weakness

Trading opportunity
Due to strong gain during the last few trading sessions, stock may falls into consolidation mode, buy on support levels.
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1 comment:

  1. AllyDecember 26, 2010 at 9:55 PM

    Hi Alex,

    Thanks for analyzing Keck Seng as requested.

    ReplyDelete

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