ENOUGH ABOUT SERBADK! TIME TO LOOK AT ANOTHER UNDISCOVERED GEM!!
With all eyeballs on “Karim Themed Stocks”, it seems like the giant had fallen and so are their associates. On today, a rough count on Dato Karim’s portfolio comprising the S,S and K, showed that he lost approximately RM500 million in net worth IN A SINGLE DAY.
Attached above is an excerpt of the viral photo that spread amongst the investor’s community.
So, what is this another undiscovered gem I’m talking about? Fortunately for us, as the government imposed full MCO dated 1st June 2021 to 14th June 2021, the company’s share price had in tandem, fell approximately 5% on yesterday.
This company – ARB Berhad (“ARBB”) had been a darling of my portfolio since 2018. Most investors are familiar with the turnaround story by the new management, of how it turned from a lumber player in a falling industry to a trendy IT company. Despite the stellar earnings the company had previously achieved, the recent quarterly performance of the company took a halt to the growth.
You see – when the results are good, people are not buying. When the results are bad, existing investors are selling. We can say that the selling pressure for ARBB is extremely strong. However, things might be slightly different if we refer to the technical performance of the company.
Personally, I used Bollinger Band, Accumulation / Distribution, ADX and Smart MCDX to undermine the trend movement as well as fund flow of the company. We did see a distribution coming out of the company, and the Smart MCDX obviously shows an outflow of funds. However, if I were to trade solely on these 2 indicators, I would’ve doomed myself few years ago.
The fund flow is what I like to measure the traders of the company, where ADX and Bollinger Band is what I would use execute trades. On the Bollinger Band end, I’m using EMA 50 as the mid-point as a method of tracking, and for Bollinger Band, you could obviously see that the company had a huge opening, and the closing share price is bouncing on the lower band (-2x of mid trend line). The ADX – despite still below the typical 40.0 range, is still showing strength contrarian to the share price and fund flow movement. From what I interpret is; the traders of ARBB are mostly out and we are left with strong shareholders who had faith in the company. Just look at today’s volume, despite the full MCO, the volume is minimal as THERE IS NOTHING LEFT TO BE FLUSHED.
Therefore, I believe the downward risks of ARBB is much more controlled in the current price. The immediate resistance would be RM0.300 (obviously) and the support is on current level. Nevertheless, any experienced trader would’ve built their position 10 minutes before market closed yesterday. However, should the share price exceed RM0.300 in this week, by all means ARBB will recover to RM0.350 – RM 0.400 region soon, indicating a potential 18% - 30% return.
Of course, I’m holding more than hundred thousand in value worth of the company. I believe I might be bias but to be frank, I did bought more on yesterday!