AirAsia broke RM1.83 support

Refer to the previous post:

The stock plummeted 4.76% on 5th August which confirmed the high volume upthrust on 29th & 31st July. The down day candle also broke the uptrend and RM1.83 support lines. This showed the possibility of further selling. However, on the next day high demands hold the stock above RM1.74. The stock was traded above RM1.74 for two days and the automatic rally closed the stock at RM1.88 on 9th August. The lack of volume indicated the automatic rally is weak and the stock was not able to hold above RM1.83.

Second high demands volume above RM1.74

The stock penetrated again the RM1.84 support on 22nd August. Then, it retested RM1.74 support with higher volume compared to the previous 5 trading days on 29th August. The Doji candle closed at RM1.75 above RM1.74 support. Here, the stock rallied 4.45% and another Doji candle occurred on 11th September. Traders must be alert on this Doji because it indicated supply below RM1.83.

Buyers vs Sellers

Current trading ranges of RM1.83 and RM1.74 indicated buyers and sellers have not decided the next trend. If you are day traders, 5% gain between this trading range could be a short term gain. Immediate cut lost below RM1.74 must be set to avoid huge losses.

The selling might persist

The upthrust on 29th July and recent prices drop showed the stock is weak. Furthermore, AirAsia net profit is dropping for the last three quarters although the revenue is increasing. Traders might rush in to accumulate this stock thinking it is cheap currently. The stock price is decided by the supply and demand on the market, the pricing of stock happens for some reasons. The stock that looks cheap might get cheaper. E.g. Sapura Energy, Armada, PA, TekSeng etc. Good earning is vital for a stock to trade at a higher price. There are plentiful of uptrend stocks with good earnings in the KLSE, smart traders would not keep their money in the downtrend stock. (Click here for the full picture).

Author: Gerald Koh