Is this Rally Over for Axiata?

This is another one of my favourite stocks that I have neglected in the past. Even though I did not participate in the rally for this stock in the past, I am still keeping it in my radar as one of my favourite stock, as I believe that one fine day, I might be all in for this stock when the time is right. However, at the time being, I will just stand aside and analyse this stock for those who want to trade this stock or already in this stock.

Is this rally over for Axiata?

Well lets look at my long and short term chart analysis follow by the recent four quarterly earning result.

Looking at the long term chart, Axiata has been trending up since March 2009 from RM 1.30 to the current level of around RM5.00. If you would have bought it at the lowest point at RM 1.30, your investment would have quadruple by now.

Based on the shape of the chart above, it looks like it is currently forming a round top which means that this stock might be coming down in the near future. In August 2011, the trading volume for Axiata is superbly high, it can means that the smart money is already getting out by creating a false signal for the dump money to go in and buy Axiata.

I might be wrong on the rounding top, but it is definitely a big no for me to invest in this stock at the very top of the chart, as the risk is too high and the chances for this stock to come down further is tremendous.

As for the short term chart, all the technical indicators such as MACD, Bollinger Band and Stochastic are currently showing a downward pattern for this stock in the coming near future. The first support for this stock should be at RM 4.68 level and after that if the Asia Market really start to go into recession starting from China, then I would expect that Axiata will go down to the RM 2.70 in the future. Even though Axiata is a strong fundamental stock for now, anything can happen, remember stock like Genting also tumble all the way down to RM 2.00 in the Asia Financial Crisis in 1997.

As for the fundamental analysis on the previous four quarterly earning, it is showing fantastic earnings growth.  This stock manage to break record revenue on the latest quarterly earning, I am not surprise that the latest quarterly earning in November 2011 will be broken again in the coming quarters. At such I would say that fundamentally this is a very strong and solid stock to invest in.

Conclusion:
Even though fundamentally this stock, Axiata, is very positive, however, technically wise, looking at the traders, speculators, stock operators perspective, this stock is due for a very sharp correction. Therefore, I would not recommend buying at this level, shall you want to invest in this stock, you should wait at the sideline for a better opportunity. Perhaps for the next Asia Crisis which I predict will happen in the coming few years.

Better be safe than sorry. There is a malay saying that I like very much and remember till now during my primary school times, it is "sikit sikit lama lama menjadi bukit". It means that little by little, long long time it will became a mountain.