Weekly Stocks Review: Airasia, Supermx, GenM, Jaks, Armada

After the coronavirus outbreak, the global indexes concluded with a pullback and bounce in February 2020. S&P 500 bounced 3.85% at 3225 and penetrated the 10-day moving average, further upside is possible due to the follow-through action. On the other hand, FBMKLCI also bounced and rallied 2.04%. I reckon the market has priced in the coronavirus news and further upside is possible because of the recent OPR interest rate reduction by BNM.

Airasia

The recent news initiated the panic sell, and the stock dropped -29.33% from the estimated RM1.65 support. I have forgotten this stock as it is not in my rules of selection, the price action is weak and there is no reason to buy this stock. Many traders do not agree with me, they said this is a good fundamental stock and good to hold on a long term basis. There is no right or wrong for the prefer methods, but cut loss must be made if it breaks 10%. The current support is RM1.12 and the automatic rally sprang up 12.38%. I reckon it is still not the right time to trade this stock. Trade safely.

Supermx

Glove manufacturing stocks are hot due to the coronavirus outbreak. I think this is temporary, it might rally tomorrow or drops slowly depends on the global news. The upthrust candle with high volume on 28th Jan indicated a strong supply below RM1.90. Furthermore, the candle on the next day showed a possibility of further distribution and it forced the stock to retest the next support. The last four trading days indicated the stock is weak, and further downside action could mean the stock has no upside potential.   

Genting Malaysia

Genting Malaysia is trading above strong support of RM3.00. Although the gap down candle on 28th January indicated bearish price action, the high volume had cancelled the possibility of further downside. Alternatively, the price action with higher volume during the week indicated strong demands for the stock. Potential rally at RM3.00 support, cut loss must be made if the stock breaks support line.

Jaks

Jaks bounced 19.77% from RM1.17 support. Before the bounce, it was weak and dropped together with other stocks during the market pullback. However, the spring candle on 3rd February with high volume indicated the demands are solid and further upside is possible due to the on-going power plant project in Vietnam. I reckon the price has increased with the global market rally, it’s not a good time to trade yet. Will keep monitoring this stock.

Armada

Except for Dayang, oil counters are dropping recently together with the crude oil price. I think crude oil price of USD51 per barrel has bottomed, and it will rally soon. As for Armada, the spring candle with high volume on 3rd February indicated strong demands rushed in accumulate this stock. I reckon it’s too early to trade this stock as the stock just bounced from a drop of -34.94%. Will keep this stock in my watchlist.

Author: Gerald Koh