FITTERS

Periodically,  TCB will pick a stock we may like to trade short term.  So, this week, TCB have picked the stock, FITTERS 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 purpose only.  Do calculate your own risk/reward ratio if you decided to trade this counter. 

-- FITTERS Weekly Chart --

Fitters has been on a bullish run that started in May 2013 and persisted into 2014.  Based on its weekly chart, the past 2 weeks saw the formation of 2 spinning top candles in succession, an indication of indecision setting into the stock.  The resultant direction of its price movement from this indecision can be either up or down.  In view that its uptrend is still intact, the spinning top may be a continuation pattern of its uptrend provided it can break and scale above 1.38 with an immediate target of 1.60.  However, if it breaks below 1.29, this will be the first sign of weakness in the stock.  A stop loss of 1.15 is recommended for mid term traders.

 

 -- FITTERS Daily Chart --

After hitting a high of 1.38, it formed a bearish harami on 27/8, implying that it is due for some correction.  It did underwent correction but its uptrend remains intact.  The breakaway gap formed on 22/8 has bullish implications for further upward movements which would take it to its resistance at 1.38.  A successful take-out of this resistance will see it trend towards its target prices at 1.46, 1.56 and 1.66.  Any weakness due to consolidation should find immediate support at 1.29/1.30 with the cushion of strong support at 1.25/1.23, the gap support.  This weakness may offer buying opportunities for future play.  For short term traders, the recommended stop loss is 1.22.

Key Notes:

1. For the cumulative period ending 30 June, 2014, it recorded a 3.5% increase in profits before tax on the back of a 21% increase in revenue.
2. Recently announced a proposed bonus issue and free warrants.
3. Since diversifying into property development in 2010, it is now venturing into the pipe business with the completion of its pipe manufacturing plant in Gebeng, Kuantan due for completion by the 4th quarter of 2014.  The plant would be commissioned in October starting with three production lines first, which should be able to churn out RM150mil in revenue for the company.

Reference:

1. http://www.bursamalaysia.com/market/listed-companies/company-announcements/1722573
2. http://www.bursamalaysia.com/market/listed-companies/company-announcements/1725893
3. Star Biz, Aug 11, 2014