EVERGREEN

Periodically,  TCB will pick a stock we may like to trade short term.  So, this week, TCB have picked the stock, EVERGREEN to put in *Stock In Focus (SIF)*.  Please do not take this as a buy signal as our TA reading for these stocks are for sharing purposes only.  Do calculate your own risk/reward ratio if you decided to trade this counter.

Background Information

Evergreen is a leading worldwide producer of quality engineered wood-based products consisting of Medium Density Fibreboard (MDF) and Particleboard with an annual production exceeding 1.3 million cubic meters. In response to worldwide market demands, Evergreen adopted a vertical integration strategy and expanded beyond its core Medium Density Fibreboard and Particleboard into value-added downstream products such as Paper, Veneer, Printed, Melamine Board Laminations, Knock Down Furniture, Sawn Rubberwood Timber and moved up stream producing Resin and having their own Rubber Trees Plantation. Evergreen's comprehensive range of upstream and downstream products has set the trend around the world.

Market Value :  RM 371,925,000

Share issued  :  513,000,000

Reference: http://evergreengroup.com.my/en/home

   Technical Analysis

Weekly Chart

Based on the weekly chart, it is in Stage 2 of the market cycle which is very bullish. Evergreen broke out from its Rounding Bottom Formation between RM 0.45 and RM 0.71 after almost 2 and half years which signaled a trend reversal. Not only that, it has also broken out from its long term down trend line. The immediate target is at RM 0.97 with immediate resistance at RM 0.78/RM 0.80.

Daily Chart

On 13 Aug, 2014, it was traded at a volume of 10.9 mil which was its all time high volume for the past 2 and half years. On 9 Jan, 2015, it broke out from the rounding bottom with a volume of 10.9 mil which make the breakout more valid. Any weakness due to the recent sharp rises and overbought situation may find RM 0.68 as support 1 and RM 0.63 as support 2. For a short term trader, you may want to stop loss if RM 0.68 is violated. For medium term trader, you may want to stop loss if RM 0.63 is violated.

Key Notes

1.  After registering losses in preceding quarters, Evergreen recorded profits during the quarter of 30 Sept, 2014, the first profit in many quarters, a promising sign to better performances. Subsequent quarterly results will provide a better indication of its future performances. (Ref: http://www.bursamalaysia.com/market/listed-companies/company-announcements/1802053)

2. There is an ongoing litigation case involving its subsidiary which the company opined they have a strong case to defend. (Ref: http://www.bursamalaysia.com/market/listed-companies/company-announcements/1605385)