FACULTY OF BUSINESS AND MANAGEMENT
BACHELOR OF BUSINESS ADMINISTRATION (HONS.) FINANCE
FIN555 - INTRODUCTION TO TECHNICAL ANALYSIS
GROUP ASSIGNMENT (40%)
JBA 242 4A
PREPARED BY:
NAME MARTIC NUMBER
MUHAMMAD AFIQ BIN ZAINI 2020837648
SHARIL AFIQ BIN TURIMAN 2020853866
MUHAMMAD SUHAIRI BIN SAPARUN 2020621696
MUHAMMAD ZULHILMI BIN HAMINUDDIN 2020482784
PREPARED FOR : MISS SHARAZAD HARIS
SUBMISSION DATE : 14 JULY 2022
ACKNOWLEDGEMENT
In the name of Allah, the Most Gracious, the Most Merciful. First and foremost,
praise be to Allah S.W.T. for giving us health, strength, and opportunity to complete this
assignment without any obstacles even though we could not have any physical discussion
as we are still not allowed to go back to our campus due to COVID-19.
Second, we want to express our sincere thanks to Miss Sharazad Haris, our cherished
and esteemed lecturer, for teaching us the course Introduction to Technical Analysis (FIN 555).
She had been exceptional in her guidance and instruction throughout this semester's
assignments, which had helped us finish it effectively. Without the information she had imparted
to us, completing this endeavor would be quite challenging.
Also, a particular thank you to Muhammad Afiq Bin Zaini, Sharil Afiq Bin Turiman,
Muhammad Zulhilmi Bin Haminuddin, and Muhammad Suhairi bin Saparun for their
collaboration, teamwork, and ideas that they contributed during the execution of this project.
Without any of the group's contributors, it could not be a successful masterpiece.
Last but not least, we would want to express our gratitude to all of our classmates
as well as anybody else who has directly or indirectly assisted us in gathering material for
this report.
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TABLE OF CONTENT
PAGE
ACKNOWLEDGEMENT 2
TABLE OF CONTENT 3
1.0 INTRODUCTION 4
2.0 COMPANY’S ANALYSIS AND RECOMMENDATIONS 5
2.1 PETRONAS GAS BERHAD (PETGAS) 5
2.2 FRASER & NEAVE HOLDINGS BHD 9
2.3 TOP GLOVE CORPORATION BERHAD 11
2.4 DUTCH LADY MILK INDUSTRIES 13
2.5 COCOALAND HOLDING BERHAD 16
3.0 CONCLUSION 19
4.0 REFERENCES 20
3
1.0 INTRODUCTION
TradingView.com and ChartNexus are a platform that gives Bursa Malaysia share price
information, any recent announcement for a quarter report, any dividend report, and any bonus
or right that has been awarded for all Bursa Malaysia listed firms. Furthermore,
TradingView.com and ChartNexus publishes data such as quarter report history, dividend
history, and any bonus issuance history. Additionally, we could get a business's technical chart
using this website and do a technical analysis on a company listed on Bursa Malaysia.
Technical analysis is a technique for predicting the direction of price movements in financial
markets by analyzing historical price and volume data. Technical analysis, according to Clifford
Pistolese, is the process of using price and volume charts as the foundation for financial
judgments.
Five firms that were listed in various industries on Bursa Malaysia are included in this
study. To ensure that we provide a variety of suggestions for investors to buy, sell, or hold the
stock, we selected five distinct firms from five distinct industries. As we offer suggestions in
several industries, investors may choose wisely to ensure that they do not suffer any significant
losses when they purchase or sell any stock from these firms.
Next, the five selected companies in Bursa Malaysia are PETRONAS GAS BERHAD
(PETGAS),FRASER & NEAVE HOLDINGS BHD , DUTCH LADY , TOP GLOVE
CORPORATION BHD and COCOALAND HOLDING BERHAD that we have been analyzing
these companies within the timeline of our cutoff that have been given to us.
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2.0 COMPANY’S ANALYSIS AND RECOMMENDATIONS
2.1 PETRONAS GAS BERHAD (PETGAS)
Petronas Gas Berhad (PETGAS) is a Malaysian gas construction and centralized utilities firm
that was created in 1983 and is headquartered in Kuala Lumpur at the PETRONAS Twin
Towers. PETGAS is principally engaged as the world's biggest gas pipeline corporation,
specializing in the production and transportation of natural gas to PETRONAS clients in
Malaysia and Singapore via the Peninsular Gas Utilisation (PGU) piping system.
On September 4, 1995, PETGAS was listed on the Main Market of Bursa Malaysia. With the
liberalization of the Malaysian oil and gas industry, the company anticipates exciting recent
innovations for the industry and an increase in pace toward becoming a more effective
consulting firm in this new era.
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Diagram 1: Petronas Gas’s technical chart
On the chart above, I have been use 5 indicator that suitable to identifying the trends of
Petronas Gas Berhad (PETGAS) for the period from 01/01/2020 to 31/12/2020. First and
foremost, the indicator that I used for this to analyze this chart is the Moving Average. A moving
average is a technical indicator used by market financial analysts to forecast the direction of a
trend. It averages the datasets of financial stability over a specified period. Experts or investors
then utilize the data to forecast the future trend of the asset price. It is referred to as a lagging
indicator since it lags behind the price movements of the underlying value in producing a signal
or indicating the direction of a specific trend. A long-term Moving Average is used because it
gives signals of the beginning of an uptrend or downtrend. It can be used to predict the direction
which is whether the market or security is going to be bullish or bearish.
There are 2 types of Moving Average which are a short-term moving average and a
long-term moving average. For the 1 year period, I used a long-term moving average. The best
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sell signal is on 01/08/2020, there is a price crossover between the price line and the moving
average line. It shows the sell signal because the price line crosses the moving average line
downwards. It also shows the sales volume increase. Therefore, people should sell the stock.
On 22/05/2020 there is a best buying signal. It shows that the price line rises through the
moving average line from below. Therefore, people should buy more stock in this period.
Secondly, I use the Bollinger band as my second indicator.Bollinger Bands are a sort of
price envelope invented by John Bollinger. Price envelopes define the upper and lower possible
price levels. Bollinger Bands are price envelopes displayed at a standard deviation point along
each simple moving average. This chart indicator is used to measure the volatility of the market.
Since the bands' distance is dependent on standard deviation, it responds to volatility
fluctuations in the original amount. Bollinger Bands consist of 3 bands which is the upper band,
lower band, and middle band. Furthermore, when the market is quiet, the bands contract, and
when the market is loud, the bands expand. This means that the more expansion between the
lower and upper band, the less volatility of the price. However, the tighter the upper and lower
band, the higher the volatility of the price of the stock.
The best buy signal is on 25/08/2021 based on the bollinger band indicator. The bullish
candlestick indicates the momentum to increase. It means that the price of the stock is volatile
to go upwards. Also, the candlestick was close under the upper band. On the same day, it also
shows the sell volume has decreased. The long position should have been initiated by buying
the stocks. On 06/05/2020, there is a best sell signal. It shows that the bearish candlestick has
touched the lower band. It indicates that the price has the momentum to decrease. Then, the
middle band has to keep those bearish candlesticks from rising. So, a short position should
have been done.
Next, another indicator that I used is the rate of change (ROC) is used to consider the
current price towards the price during the previous period. The rate of change (ROC) is the rate
at which a variable changes over a certain period. ROC shows the speed at which a stock’s
price is changing. When discussing momentum, ROC is frequently employed, and it can be
described as a ratio of a modification in one variable compared to a comparable shift in some
other, visually, the change is shown by the trend line. It is a pure momentum oscillator that
measures the percent change in price from one period to the next.
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When the ROC passes the zero line from above, it indicates that the price is falling.
Meanwhile, when the ROC crosses the zero line from below, it indicates a price increase. The
highest ROC on 28/02/2020 crosses the zero line from above, indicating a fall in price and
momentum. As a result, people will begin to sell. The best ROC will then pass the zero line from
below on 20/05/2020. It demonstrates that the price is rising and the momentum is increasing.
As a result, people begin to purchase. It denotes expanding velocity.
The relative strength index (RSI) is a momentum indicator used during technical
indicators that examine the size of recent price fluctuations to assess overbought or oversold
circumstances in the price of a stock or other asset. The RSI is shown as an oscillator.
Furthermore, the other indicator that I used to analyze this chart is the Relative Strength
Index (RSI) is a technical indicator that generates buy and sell signals and displays overbought
and oversold situations. When the RSI exceeds 70%, the stock is deemed overbought, and
when it falls below 30%, the stock is considered oversold. The RSI will be below 30% in June
2020. That is, it was oversold. It sends out a buy signal, and individuals will begin buying when
the prices try and cross over. When the RSI crosses 70 percent in May 2021, the market is
overbought. When the price recrosses over, it gives a sell signal, and individuals begin selling.
Last but not least, a stochastic oscillator which is a momentum indicator that compares a
safety stock closed to a variation of its prices over a given period. The oscillator's reactivity to
market changes can be reduced by altering the timeframe or by adopting a moving average of
the output. It is used to provide technical indicators for overbought and oversold conditions. The
stochastic oscillator is one of the most recognized momentum indicators used in technical
analysis.
Stochastic prices tend to close near the upper end of the trading range during an
uptrend. On 04/09/2020, when the blue line is above the 80% limit, it displays the true sell
signal. As a result, people can prepare to sell but must consider other indicators. When the
stocks are overbought, it shows the sell signal and it should be countered by selling the stocks.
On 14/10/2020, the blue line has fallen under the 20% limit, which indicates that the stock was
oversold. It displays the genuine buy signal.
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2.2 FRASER & NEAVE HOLDINGS BHD
Fraser & Neave or known as F & N is a company in the Food and Beverage industry that
has stood for 138 years, providing Halal and high quality products for generations. This
company is shariah compliant. F & N sustainability performance brings light to
shareholders for creating long-term portfolios. F & N was listed on bursa on Consumer
Non-Cyclicals (Beverages), stock number 3689
Diagram 2: F&N’s technical chart
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The chart above show, F&N technical chart from January 2020 until the cut off date of
december 2020. Based on the chart, we could see 5 indicators are used to assist the investor to
potential investors, which are Bollinger band, RSI, SMA, Stochastic and MACD.
Based on the technical chart, we could see a downtrend on F&N stock from January to
early april. By using technical analysis, the support line has been plotted at 27.32 and the
resistance line at 34.34. Based on that we can see that the price bounced back after touching
the support line on 17 March 2020.
Based on the bollinger band, the bearish run ended by April where the bollinger band
began to widen. After that, the price had an uptrend in late March , this was confirmed by the
MACD indicator where the MACD line crossed above the fast MACD signal line. Also if we look
at the MACD histogram, we can see the price trend is supported by the positive growing
histogram (green) from the same. From 24 April until 30 July the price entered a long
consolidation trend where price moved sideways. This was supported by RSI indicator
movements that remain between 50% and 70%. The consolidation trend had a breakout on 3
August. This is supported by the RSI movement toward the 30% line. After that, the price had 2
uptrend movements, from 5 Aug to 29 Aug and 1 Sept to 17 Sept. The stochastic indicator
shows that in this period it moved from the 20% line to 80%. The price once again entered
consolidation on 2 Dec. This is supported by the stochastic indicator and RSI indicator that start
to move sideways.
So what is next for F&N stock ? It is not advised to buy or sell but better to wait until the
price consolidation has a breakout. Closely watching any changes in volume will help investors
to predict if it is a downtrend or uptrend breakout. During consolidation, the volume is usually
low and flat. Investors also have to be aware that long ranges of consolidation will often have
more false breakouts. Investors don’t have to worry because consolidation is natural and
necessary for the market before it enters into a new trend, either different or continuing from the
previous trend. For now, investors should hold the stock and keep an eye on the trend
afterward.
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2.3 TOP GLOVE CORPORATION
Top Glove is a Malaysian rubber glove manufacturer that also makes face masks, dental dams,
and other goods. The firm owns and operates 50 manufacturing facilities in Malaysia, Thailand,
China, and Vietnam. Marketing offices are located in these countries, as well as the United
States, Germany, Vietnam, and Brazil. Tan Sri Dr Lim Wee Chai established the company in
Malaysia in 1991 with a single production line and a staff of 100 employees.
Diagram 3 : Top Glove’s technical chart
Diagram 3 shows the technical chart for the Top Glove company. There are many
indicators that we can use to analyze the stock of the company but we picked 3 indicators which
are Rate Of Change (ROC), Stochastic, and Relative Strength Index. As of the cut-off date, the
current price is RM 1.010. On this date the ROC indicator shows a buy signal for this company’s
stock. This is because the ROC value is less than zero which indicates a buy signal. The ROC
may be used to identify markets that are overbought or oversold.
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The stochastic indicator also indicates a buy signal at the present price. This is due to
the fact that the percent K line is above the percent D line in the oversold zone, which is less
than 20. The rapid line in this illustration represents the stochastic percent K, whereas the slow
line represents the stochastic percent D. The percent K line is more sensitive and rotates faster,
whereas the percent D line is less sensitive and takes longer to turn. This indicates that percent
K will reverse direction before percent D, and crossover will occur before the percent D line
reverses direction.
As for the RSI indicator, the RSI line is not showing a buy or sell signal. This is because
for RSI, when the RSI line is below 30, it will indicate a buy signal, which will move up and cross
over the oversold line, and when the RSI line is over 70, it will indicate a sell signal, which will
move down and cross below the overbought line. As at cut off date the RSI line is not crossing
either the overbought or oversold line but since the stock is in a downtrend, the line is heading
downward, closing to the oversold line which we predict that a selling signal will appear.
Last but not least, based on our findings from diagram 3 and with the aid of the
indicators ROC, Stochastic, and RSI, we wish to advise present owners to sell their shares in
order to minimize loss for the shareholder. The indicator did not show any hint that it would
make any reversal. We wish to advise prospective investors to hold the company's shares
before purchasing it. This is due to the stock of Top Glove's downtrending tendency. Additionally,
according to ROC and Stochastic indicators, there is no indication that it will reverse course,
allowing the potential investor to buy the stock at the lowest price.
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2.4 DUTCH LADY
Dutch Lady Milk Industries Berhad is a milk based provider in Malaysia. This company is
in the Food & Beverages industry. It is also a multinational company with strong local advantage
and the global presence.
Diagram 4: Dutch Lady’s technical chart
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Based on the diagram above, we can see the technical chart for the stock of DLADY. There are
5 indicators that were used to advise the current and new potential investors which are the
Bollinger Band, Simple Moving Average, Moving Average Convergence Divergence (MACD),
Relative Strength Index (RSI) and the Stochastic. This stock was analysed from 1st January
2020 until the cut-off date which is on 18th November 2020. From March 2020 until April 2020,
Dutch Lady is having a uptrend pattern. Next, from April 2020 until December 2020, Dutch Lady
is having a downtrend pattern.
The first indicator is the Bollinger Band. It consists of 3 bands such as Upper band,
Middle Band and the Lower Band. The bands make up a volatility indicator that calculates the
price of an asset in proportion to past trades' relative highs and lows. When the prices rise, the
bands get wider, and when prices fall, they get narrower. It is suggested for the current investor
to sell their stock as at February 2020 until the middle of March 2020. It is because the upper
band of the Bollinger Band has touched the price, it indicates that the price will change its
direction downwards. But, after the price has go down, the lower band of the Bollinger Band has
touched again the price. It indicates the bullish momentum for the price to go upward. It is a buy
signal for the current investor on March 2020.
The second indicator used is the Simple Moving Average. This indicator were used
because it is effectives in shorter time periods and more reactive to daily or hour price changes.
Also, it is a lag indicator means this indicator just follow the trend. The best buy signal for the
current investor is on the 20th March 2020. When the price fall above the moving average line, it
indicates the investor to initiate the long position. The volume also shows the increase. Thus,
people should buy the stock. On 23rd April 2020, there is a sell signal for the current investor.
When the crossover between the price occurs and fall under the moving average line, it
indicates the sell signal. It were followed by the decreasing volume. Thus, people should sell the
stock.
The third indicator that were used to analysis this stock is the Moving Average
Convergence Divergence (MACD). This trend-following momentum indicator shows relationship
between two of the moving average of a stock price. On 25th March 2020, there is an
intersection between the red line and blue line. When the blue line get over the red lines, it
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indicates buy signal for the current investor. On 4th May 2020, the blue line getting under the red
lines indicates the sell signal for the investors.
The fourth indicator that were used is the Relative Strength Index or RSI. It is a
momentum indicator used by the current investor to measure the magnitude of recent price
changes and to evaluate those of the stocks if they were overbought or oversold. The graph on
20th March 2020 shows it is passing under the 30% line. It indicates that the stocks were
oversold and current investor should counter it by buying the stocks. But on 27th April 2020, the
graph that were above 70% line shows the stocks were overbought. Investor should take an
opportunity to sell the stocks.
The fifth indicator that were used in this analysis is the Stochastic. This indicator have a
relatively high degree of accuracy and enables the traders to enter and exit their positions
precisely. When the blue line is above the 80% line, it indicates that the stocks were overbought.
It gives sell signal to the current investor just like in 7th July 2020. On 9th March 2020, when the
blue line is below the 20% line, it indicates that the stocks were oversold. It gives buy signal to
the current investor.
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2.5 COCOALAND HOLDINGS BERHAD
Cocoaland Holdings Berhad is a gummy candy provider in Malaysia. This company is in
the Food & Beverages industry. It was listed in the Second Board of Bursa Malaysia Securities
Berhad on 18 January 2005 and later successfully converted to Main Board on 18 July 2006.
Diagram 5: Cocoaland Holdings’s technical chart
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Based on the diagram above, we can see the technical chart for the stock of COCOLND. There
are 5 indicators that were used to advise the current and new potential investors which are the
Bollinger Band, Simple Moving Average, Moving Average Convergence Divergence (MACD),
Relative Strength Index (RSI) and the Stochastic. This stock was analysed from 1st January
2020 until the cut-off date which is on 23rd November 2020. From January 2020 until March
2020, Dutch Lady is having a downtrend pattern. Next, from March 2020 until May 2020, Dutch
Lady is having a downtrend pattern and continues with sideway until the end of 2020.
The first indicator is the Bollinger Band. It consists of 3 bands such as Upper band,
Middle Band and the Lower Band. The bands make up a volatility indicator that calculates the
price of an asset in proportion to past trades' relative highs and lows. When the prices rise, the
bands get wider, and when prices fall, they get narrower. It is suggested for the current investor
to sell their stock as at 9th March 2020 until 23rd of March 2020. It is because the lower band of
the Bollinger Band has touched and reacted with the bearish price. After that, on 6 th May 2020,
there is a signal for the current investor to buy the stocks. It is because the upper band has
touched and reacted with the bullish price. But, it is just a temporary moment for them to buy the
stocks before they have to sell it on 10th June 2020 because of the sell signal occurs again.
The second indicator used is the Simple Moving Average. This indicator were used
because it is effectives in shorter time periods and more reactive to daily or hour price changes.
Also, it is a lag indicator means this indicator just follow the trend. The best buy signal for the
current investor is on the 27th March 2020. When the price fall above the moving average line, it
indicates the investor to initiate the long position. The volume also shows the increase. Thus,
the investor should buy the stock. On 9th March 2020, there is a sell signal for the current
investor. When the crossover between the price occurs and fall under the moving average line,
it indicates the sell signal. It were followed by the decreasing volume. Thus, people should sell
the stock.
The third indicator that were used to analysis this stock is the Moving Average
Convergence Divergence (MACD). This trend-following momentum indicator shows relationship
between two of the moving average of a stock price. On 31st March 2020, there is an
intersection between the red line and blue line. When the blue line get over the red lines, it
indicates buy signal for the current investor. On 29th May 2020, the blue line getting under the
red lines indicates the sell signal for the investors.
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The fourth indicator that were used is the Relative Strength Index or RSI. It is a
momentum indicator used by the current investor to measure the magnitude of recent price
changes and to evaluate those of the stocks if they were overbought or oversold. The graph on
25th March 2020 shows it is passing under the 30% line. It indicates that the stocks were
oversold and current investor should counter it by buying the stocks. But on 13th April 2020, the
graph that were above 70% line shows the stocks were overbought. Investor should take an
opportunity to sell the stocks.
The fifth indicator that were used in this analysis is the Stochastic. This indicator have a
relatively high degree of accuracy and enables the traders to enter and exit their positions
precisely. Sell signal occurs for the investor on 13th May 2020. When the blue line is above the
80% line, it indicates that the stocks were overbought. On 24th March 2020, when the blue line is
below the 20% line, it indicates that the stocks were oversold. It gives buy signal to the current
investor.
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3.0 CONCLUSION
In conclusion, technical analysis is a trading technique that evaluates investments and
identifies trading strategies through the use of statistical trends derived from market activity, like
price movement and volume. Current market volatility and market prices in security, according to
technical analysts, may be highly predictive of the security's upcoming price changes. This
indicator is mostly focused on Overbought or Oversold conditions. Short-term trading indicator.
This method yields modest but acceptable signals.
Furthermore, distinct patterns can be seen from each sector and area for the previous
year. Some industries' stock chart patterns would be in an uptrend, while others were in a
sideways or downward trend. We learned well how to study the trend of a market as a result of
the project. A corporation with the assistance of the indicator We also discovered whether we,
as investors, can choose whether has to buy, sell, hold-to-buy, or hold-to-sell the company's
stock. It is critical to be aware of the relevant information because it can affect whether the final
outcomes will result in income or losses when investing in specific equities over time.
Aside from that, it is vital to monitor the economic situation and the manufacturing
industry. This can help investors set goals for larger or smaller volume purchases, along with
preventing high risks in the firm. It's difficult to identify stocks with exceptional regularity,
however, it's not impossible. This is when technical analysis can come in handy. It is also
important to remember that no technical indication is 100 percent correct. None of them
consistently provide 100 percent accurate signals. The most astute traders are constantly on the
lookout for clues indicating their favorite indicators' readings are inaccurate. When applied
properly, technical analysis can significantly increase your trading results.
Finally, the basic goals of fundamental indicators are to profit from trading by monitoring
market patterns and statistics, determining when to enter and exit a market, especially when it
starts to shift, and avoiding allowing emotions to influence trading decisions. As a result, it is
critical to understand when and how to enter and exit any market/stock.
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4.0 REFERENCES
Cocoaland Holdings Berhad (2022). Reviewed in 20 June 2022 from
https://www.cocoaland.com/about-us
Pring, M. (2014). Technical Analysis Explained, Fifth Edition: The Successful Investor’s Guide to
Spotting Investment Trends and Turning Points (5th ed.) [E-book]. McGraw Hill.
Fraser & Neave (2022). Reviewed in 23 June 2022 from
https://www.fn.com.my/about-us/
ChartNexus [Computer software].ChartNexus Sdn. Bhd.
Top Glove Corporation (2022). Reviewed in 15 June 2022 from
https://www.topglove.com/corporate-profile
Dutch Lady Milk Industries (2022). Reviewed in 17 June 2022 from
https://www.dutchlady.com.my/our-company/
Petronas Gas Berhad (2022). Reviewed in 19 June 2022 from
https://www.petronas.com/pgb/
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