3A broke to the upside of its flag formation at RM1.04 & closed the morning session at RM1.11 (see Chart 1). This breakout could herald the start of an upleg for this stock which has declined from a high of RM2.30 in early 2010 and further consolidated for 18 months at RM0.85-1.05. Its next resistance levels are RM1.10-1.15, RM1.40 & RM1.60. For more, see Chart 2.
Chart 1: 3A's monthly chart as at Jun 11, 2015_12.30pm (Source: ShareInvestor)
Chart 23A's monthly chart as at Jun 11, 2015_12.30pm (Source: ShareInvestor)
Financial Results & Valuation
At this moment, it is hard to envision 3A going beyond RM1.40 as its financial performance is really nothing to shout about. With last 4 quarters' EPS of 4.6 sen, 3A is now trading at an elevated PE of 24 times.
Diagram: 3A's last 10 quarterly results
Conclusion
Based on technical consideration, 3A could be a good trading BUY. However, you need to exercise careful discretion in the current market.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, 3A.
3A (0012) - 3A: The Start of the Upleg?
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