Trading Room – Tue 30 Oct 2018
My E.G. Services share price was battered recently on worries about the fallout from the charges against former deputy prime minister Datuk Seri Ahmad Zahid Hamidi.
However, news agencies reported that the company has released a press statement to Bursa Malaysia saying that it was not implicated in the charges against Ahmad Zahid.
A stockbroker report subsequently says that the plunge in the share price could be an opportunity to accumulate the stock.
What could be an elite trader’s trading plan towards the stock?
As highlighted by the mPower Algorithm report, the stock has a beta of 1.45, which means it is more volatile than the market and hence would be a good target to trade by aggressive traders.
We also like the stock for trading given that it’s a consensus stock which is tracked by analysts and also institutional funds and has a high volume and liquidity. In fact, the stock has a five-day simple average of around 75.0m shares traded daily.
Based on data from Bloomberg, the stock is tracked by at least 7 analysts and are quite well-liked with an average fair value fundamental target price of RM1.72.
That said, the stock current price of RM1.13 is well below that of the fair value target price.
My E.G is a consumer stock and is categorised as a technology provider under the digital services sub-classification by Bursa Malaysia classification.
Based on the two critical levels highlighted by our mPower Algorithm report just last week, the share prices fell as much as more than 20% soon after it broke the two levels, which are the key triggered levels for traders for the stock based on our Master Algorithm.
Short sellers who took action (where regulations permit) and long buyers who avoided the stock on this key trading setup information would have benefited greatly as would have the elite trader members of our mPower Algorithm and mPower Trading programs, who have first-hand access to our report.
With the steep fall, should traders continue to short the stock (where regulations permit) at its current level of RM1.13 at the close of trading yesterday?
Or is it a good time to buy the stock now at a much cheaper price now, considering that it is deemed even more “undervalued” by analysts based on the wide discount from its fair value assigned?
Monitor the key trigger level highlighted by us in the mPower Algorithm report today for elite traders and read what other information you need to know critically including a key stop loss level and preferable volume spike level.
The stock has good target levels in our view and is thus attractive given the projected reward to risk ratio.