Stock Tips: 6 Signs a Stock Is Nearing a Top

How can you tell when a market is exhausted from a long term up-trend? 
The current market leaders will start to form climax tops after huge gains over the past 6, 12 or 18+ months.

So, how do we identify a climax top?
The following characteristics are typically found in a stock that is forming a climax top:

1. A quick run-up or accelerating gains over a short period of time after a long term up-trend. The gains will be much larger during this short term run, proportionally, than the entire up-trend.
2. A large gap-up after several months of a steady up-trend. Investor's Business Daily (IBD) calls this an "exhaustion gap".
3. The largest daily and/or weekly volume of the entire up-trend.
4. A large single day point gain, the largest of the entire up-trend.
5. An intraday move to new highs on above average volume but a close that results in a loss.
6. A stock that is trading 100% above it's 200-day moving average. IBD states that a stock trading 70% above its 200-day moving average is showing exhaustion.

Take a look at the $TZOO Travelzoo charts (daily and weekly).

Weekly Chart

As you can see, TZOO has confirmed the following red flags for a climax top formation:

• 10 of the past 13 days have been up days.
• A 68% gain over the past 13 trading days and a 100% move over the past month. Stock is up 900%+ since March of 2009.
• The largest daily and weekly volume of the entire run.
• A new high intraday with a close that resulted in a loss (today: a new high with a reversal to close down 3.69% on volume 485% larger than the average).
• The stock is trading more than 130% above its 200-day moving average.

With all that said - what should you do? I suggest that gains are locked in, at least a portion of your position 1/3 or 1/2 at a minimum.

In addition to locking in individual gains (in examples like TZOO), I highly suggest that you start to watch all market leaders and the general market indices for red flags.

Daily Chart 

Source: http://www.chrisperruna.com/

Halal food index growing at fast pace and likely to overtake Dow Jones Islamic Index

KUALA LUMPUR: The world's first halal food index, the Socially Acceptable Market Investments (SAMI) Halal Food, is anticipated to grow even faster than the Dow Jones Islamic Index (DJII) in terms of size, branding and spin-off products.

This index is championed by Thomson Reuters Global head of Islamic Finance & OIC Countries Rushdi Siddiqui in cooperation with Ideal Ratings. It is backed by Thomson Reuters and supported by the World Halal Forum (WHF).

The SAMI Halal Food index and its sister index, the SAMI Halal Participation Index, were launched during the WHF yesterday. Rushdi had also championed the DJII in 1999.

Rushdi Siddiqui says halal is not just about certification

“Looking at how the Dow Jones Islamic Index has grown, I foresee the SAMI index to become a globally recognised index even faster than the DJII. Here, its easier to connect with the investors. Halal is not just about certification. It involves the whole production chain from farm to fork. Even with a big sell-off in markets, the investor still needs to consume. The SAMI index is a consumer non-cyclical sector,” said Rushdi.

Containing over 200 stocks from six sectors with a market capitalisation of US$114bil, 95 of these stocks are from Malaysia.

The biggest Malaysian stocks on the SAMI index are Sime Darby Bhd,Nestle (M) Bhd and Genting Plantations Bhd.

To date, the SAMI index has outperformed several leading global food indexes from March 2010 to March 2011 by 20%, according to IdealRatings.

The SAMI index has initially confined the criteria to those companies from Muslim countries and it will consider including companies from OECD countries including Britain, the United States, Canada, Brazil, France, the Netherlands and others,” said IdealRatings chief executive officer Mohamed Donia.

Rushdi expected more developments to the SAMI index including getting more companies as members and more institutions issuing products as a spin-off of the index.

He said the fact that so many stocks in the SAMI index were chosen from Malaysia put another feather in the country's cap.

“It would be good if Malaysia Inc would seed a fund off this index,” said Rushdi.

Source: Star online, 5 April 2011

Bursa Malaysia - WTK slides after RHB downgrade TP to RM1.56

Stock Name: WTK
Company Name: WTK HOLDINGS BHD
Research House: RHB

WTK Holdings Bhd, a Malaysian timber producer, fell in Kuala Lumpur trading as RHB Research Institute Sdn Bhd cut its rating on the stock because of its limited upside after rallying 65 per cent since the Japan earthquake on March 11.

The shares slid 1.9 per cent to RM2.04 at 9:22 a.m. local time, set for their steepest decline since March 31.

The stock rating was reduced to “market perform” from “outperform,” RHB said in a report today. -- Bloomberg

Bursa Malaysia / KLSE Top Stock Pick 2011 by Credit Suisse

 Updated based on last price 5 April 2011

Stock Name	Ref Date	Ref Price	Price Diff	Last	Range	Open	Change	Volume
AIRASIA	29/03/2011	2.68	+0.00	2.68	2.64 - 2.69	2.68	+0.00	5,902,100
AXIATA	29/03/2011	4.72	+0.10	4.82	4.79 - 4.87	4.86	-0.04	12,595,300
GENM	29/03/2011	3.60	+0.08	3.68	3.68 - 3.79	3.80	-0.12	5,506,700
IJM	29/03/2011	6.11	+0.35	6.46	6.41 - 6.52	6.45	+0.01	4,074,500
KLK	29/03/2011	21.10	+0.08	21.18	21.16 - 21.20	21.16	+0.02	497,200
SUNREIT	29/03/2011	1.03	+0.03	1.06	1.06 - 1.07	1.06	+0.00	513,800
TENAGA	29/03/2011	6.00	+0.21	6.21	6.17 - 6.21	6.18	+0.03	2,091,900
YTLPOWR	29/03/2011	2.27	+0.03	2.30	2.28 - 2.30	2.29	+0.01	4,337,700
UEMLAND	29/03/2011	2.67	+0.23	2.90	2.88 - 2.98	2.95	-0.05	6,351,400

Petronas Chem Target Price (TP) estimate at RM8.50

Petronas Chemicals Group Bhd’s share-price estimate was raised to RM8.50 from RM7.50 at Credit Suisse Group AG to reflect higher earnings forecasts, bolstered by higher oil prices.

The company’s 2012 earnings estimate was raised 21 per cent while its forecast for 2013 was increased 8 per cent, Paworamon Suvamatemee, an analyst at Credit Suisse, wrote in a report today.

The stock was maintained as “outperform.” The shares have gained 36 per cent this year, the second-best performer on the Kuala Lumpur benchmark stock index. -- Bloomberg



Source: Business Times, 5 April 2011

Icon City- To be launced by Mah Sing next quarter

KUALA LUMPUR: Mah Sing Group Bhd (8583), the country's fifth largest developer by revenue, will launch Icon City, a RM3 billion integrated commercial development in Petaling Jaya, Selangor, in the next quarter.

Group managing director and group chief executive Tan Sri Leong Hoy Kum said Mah Sing will be launching more commercial and industrial projects this year to build the two segments.

Mah Sing has 33 ongoing developments with remaining gross development value and unbilled sales of RM11.4 billion, and RM4.2 billion has been earmarked for commercial and industrial projects.

Mah Sing may replicate the development of Icon City to offer mix products, but it would depend on location and land size, he said.
Icon City comprises seven- to eight-storey lifestyle shop-offices, gourmet street with 20 two-storey food outlets, small office versatile-offices (Sovo), serviced apartments, lifestyle mall, boutique hotel and office towers.

Leong is bullish that Icon City will command good sales because of the product mix, design and location.

Icon City is located on a 7.93ha site in SS8, Sungei Way, a site formerly occupied by Matsushita Group of Co. The land is situated at the crossroads of the Lebuhraya Damasara-Puchong and the Federal Highway.

With unique architectural features, the development would showcase designs, such as forest and water themed plazas, sky glass bottomed pool roof garden and moulded landscapes.

"The shops are on en-bloc sales and we have overwhelming response from potential buyers. It is a testament to our product quality, branding and track record," he said.

Leong said for the serviced apartments and Sovo, Mah Sing is looking at both strata and en-bloc. He added that the five- to seven-year development will comply to the Green Building Index, Green Mark and LEED standards. - By Sharen Kaur


Source: Business Times, 4 April 2011

ECM, Kenanga jump on merger report

ECM Libra Financial Group Bhd and K&N Kenanga Holdings Bhd rose in Kuala Lumpur trading after the Edge reported that the two Malaysian investment banks were considering a merger, citing unidentified people familiar with the matter.

ECM Libra climbed 3.3 per cent to 93 sen at 9:11 a.m. local time, set for its highest close since Jan. 11, 2008. Kenanga jumped 5.7 per cent to 83.5 sen, set for its highest close since Jan. 17. -- Bloomberg