CENSOF HOLDINGS BERHAD

Periodically,  TCB will pick a stock we may like to trade short term.  So, this week, TCB have picked the stock, CENSOF as our "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

Stock Name	CENSOF
Stock Code	5195
Listing	Main Market
Sector	Technology
Industry Classification	Industry Class Industry Group Industry Sub Industry Main Industry Technology Software and IT Services Application Software Solution Providers
Company Activities	The Company is principally engaged in the business of investment holding.
Group Activities	The Censof Group is a financial management and business solutions provider. The Group provides its services to government and commercial sectors. The Group is organised into the following main business segments: a) Financial Management Software Solution - design, development, implementation and marketing of financial management software and related services via its subsidiary, Century Software (Malaysia) Sdn. Bhd. This segment is the main revenue contributor. b) Payment Aggregation Solution - providing services for financial applications, electronic payments and collections solutions via its subsidiary, T-Melmax Sdn. Bhd. c) Wealth Management Solution - providing services for portfolio management, fund accounting, unit registry, selling agent and online transaction via its subsidiary, PT. Praisindo Teknologi. d) Training Solution - providing training services in areas related to information technology via its subsidiary, Knowledgecom Corporation Sdn Bhd. e) Information Communication Technology - supply, delivery, installation, testing, commissioning and maintenance of IT hardware, development, management and provision of Business To Business (B2B) e-commerce and computerised transaction facilitation services, providing of cyber security solutions, managed services, project fulfilment, assets maintenance and contact centres.
Principal Products / Services	a) Financial management software solution and services, including financial management system for corporate, government, distribution and retail sectors; local council system; tender management system and business performance management b) Payment aggregation solution - It provides web-based online banking solutions for all types of bulk payments and collections for Corporations, Universities and small and medium-sized enterprises.  c) Wealth management solution including investment management system and web security & wan optimisation solution d) Training services in areas related to information technology

FINANCIAL SNAPSHOT

Reference - the company’s Annual Reports

TECHNICAL ANALYSIS

There is a saying that "History Always Repeats Itself".  Well, will History Repeats Itself  with Censof? 

Historically, on August 2013, Censof formed a Hammer after being beaten down to a low of RM 0.32. Subsequently, it broke out from its Falling Resistance line and trended all the way up to the then high of  RM 0.63.  This pattern of price movement was detected in Censof lately.  Its current price movement bears similarity to the aforementioned pattern. It formed a Hammer after its price was beaten down to RM 0.29 in Dec, 2014 and it broke out of its Falling Resistance line this week.

--Weekly Chart --

Analyzing it in further detail, on the weekly chart (medium term), Censof is currently in Stage 2 of the market cycle which is very bullish. It has been consolidating for a few weeks in Stage 1 since it hit its all-time low of RM 0.29 after going through Stage 4 when its price free fall from RM 0.625 to RM 0.29. Stage 4 ended with the low of RM 0.29. Since then, during the 2^nd week of January 2015, its price has been trending upward strongly with bullish candles that included the bullish 3 white soldiers pattern. This week it has broken above its strong downtrend resistance line reinforcing its bullishness. It is trending with an upward bias towards its 3 years high of RM 0.67.

So, its interesting to observe to see if history will repeat itself to witness Censof trending back to its previous high of RM 0.67.

--Daily Chart --

On the daily chart (short term), it broke out of its immediate Resistance Line at RM 0.48 on 23/01/2015 with increased volume confirming its Trend Reversal. It is expected to break above RM 0.525 to test its next resistance at RM 0.56.  If broken, it should test its very strong resistance at RM 0.60/ RM 0.625. If Censof overcomes the RM 0.625 resistance, it is expected to test its previous 3 year's high at RM 0.67. Any weakness should find immediate support at RM 0.48/RM 0.47 and further back, at it strong support at RM 0.43. For the short term traders, you may want to stop loss if RM 0.46 is violated. For medium term traders, you may want to stop loss if RM 0.40 is violated.

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)