Weekly Stocks Review: Pharmaniaga, Jaks, Kheesan, KNM, Penta

Pharmaniaga recent trading volumes increased drastically. After the rally in April 2019, the stock fell slowly with low volume which indicated the demands were not able to hold the stock price. I always avoid this type of chart, sometimes the implication of descending triangle might mislead trader who thinks it has bottomed. You can see the candles on 10 and 11 October, it seems the RM2.25 support was valid. Then, the support was further backed by the rally and consolidation actions toward the end of October that implied a possibility of an imminent rally. These are fake indicators, the collapsed on 31st October wiped out the gain with high volume. I think traders should avoid this stock in the first place because the stock was selling below the long term 65-day moving average. The upthrust candle on 11th November confirmed the distribution action. Trade safely.

Jaks pullbacks to test RM1.118 support and it still presents an upside potential action. This pullback could be the traders were locking their profit after the strong rally in October and November 2019. Although 27th November red candle with high volume might be a warning sign of further selling, however, the two green candles on 2nd and 3rd December indicated there were strong demands. Currently, RM1.22 serves as the support.

Kheesan bottomed in August 2019 and consolidated between RM0.23 and RM0.33. I saw this stock last month but I didn’t have the courage to buy this stock because the fluctuate quarterly revenues and profits. Since the stock does not comply my rules, I put aside this stock. The recent skyrocketed actions might be an accumulation phase but I reckon traders should not chase high.

KNM is traded below 65-day moving averages. The death cross confirmed the selling action and the stock might plummet if RM0.36 support is broken. You can see the activities after the mid-November 2019, the stock collapsed with volumes. It indicated there were no demands to fill the supply. I reckon to put this stock in the watchlist for monitoring purpose.

Penta gapped down on 29th November with high volume. Although the gap down was -4.32%, strong demands had rushed in to hold the price above RM3.80. I think it is too early to determine whether the stock is under accumulation or distribution phase. Back in November, I had a discussion with my friend, David before the gapped down. I told him that the activities in October and November implied a possibility of some large operators were distributing. Luckily, we didn’t purchase this stock by thinking the company has good fundamental. I reckon to put this stock in the watchlist.

Author: Gerald Koh