BBA (HONS) FINANCE: SEMESTER SEPTEMBER 2019 – JANUARY 2020

FUNDAMENTAL OF TECHNICAL ANALYSIS (FIN555)

Stock Technical Analysis: MAXIS BERHAD

MIESHIRL VIVIE DAIVON

CONTACT INFORMATION ABSTRACT

Email: This paper provides a short-term (6 months) technical analysis for Maxis
[email protected] Berhad stock code (6012) listed under trade and services industry of Bursa
Malaysia’s main board. The technical analysis ideas: Target year end 2020
Phone No.: price is RM0.500 with bullish expectations. In the next 6 months, the stock
017-8314475 price is expected to be traded within the support level of RM0.450 and
resistance level of RM0.555. Trading advice: To buy now and sell at the end
Date of Submission of the year with target profit of RM0.105.
31 December 2020

TABLE OF CONTENTS

INTRODUCTION TO THE STOCK

1.1 Company Stock Summary
1.2 Historical Stock Price Charts (Short term -1 Year)

TECHNICAL ANALYSIS
2.1 Price and Volume Patterns
2.1.1 Trendline
2.1.2 Candlestick
2.1.3 Support
2.1.4 Resistance
2.1.5 Volume
2.2 Technical Indicators
2.2.1 Moving Averages: Short Term and Long Term
2.2.2 Envelopes
2.2.3 Bollinger Bands
2.3 Momentum Indicators
2.3.1 Rate of Change (ROC)
2.3.2 Relative Strength Index (RSI)
2.3.3 Moving Average Convergence Divergence (MACD)
2.3.4 Stochastic

PRICE FORECAST
3.1 Short Term Perspective
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INTRODUCTION TO THE STOCK

1.1 Company Summary

Maxis Berhad is the leading converged solutions provider in Malaysia providing a variety of high quality
digital services encompassing voice, data, and solutions. This company was listed on Bursa Malaysia on
19 November 2009 and headquartered in Kuala Lumpur, The company generates mobile revenue from
prepaid and post paid subscribers, with roughly an even split between both. Within enterprise services,
Maxis provides traditional managed services in addition to mobile and fixed services. Additionally, the
company owns fibre backhaul infrastructure. The company generates the vast majority of its revenue in
Malaysia. This company net profit for the third quarter ended Sept 30, 2020 rose slightly to RM365
Million from RM358 Million. Its revenue declined 3.2% to RM2.21 Billion from RM2.28 Billion previously.
Maxis Berhad might not be profitable for investment. Since share price follow earning per share, that
means growth may be declined.

Table 1: Summary of the company stock

Company Name : MAXIS BERHAD
Company Website : https://www.maxis.com.my/home/
Nature of Business : Communications service provider
Industry Category : Telecommunications
KLSE Listing Board : Main market
Date of Listing : 19 November 2009
Stock Code : 6012

1.2 Historical Stock Price Charts (Short term -1 Year)

Figure 1 shows the historical data of Maxis Berhad on 30 December 2019, the opening price of the stock is RM5.050 and it
closed at RM5.120. As the movement control order have been implemented in March 2020, it causes the price of stock to
change. Whereby, on 25 March 2020, the opening shows a drop in price which is RM5.051. This shows that, the pandemic
of Covid-19 has badly affected the stock prices of Maxis Berhad.

Figure 1: Maxis Berhad historical stock price performance (1 year)

Source: Adapted from: https://www.malaysiastock.biz/Stock-Chart.aspx?securitycode=6012&mode=1D
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TECHNICAL ANALYSIS

Price and Volume Patterns

Trendline, Candlestick, Support, Resistance, Volume

The trendline, candlestick, support, resistance and volume are shown based on figure 2. As for the
trendlines, the uptrend and downtrend have shifted significantly over a 6 month period from July to
December 2020. On 20 July 2020, the uptrend for this stock is RM4.782 to RM5.158 on 30 August 2020.
As for the downtrend was RM5.105 on 9 November 2020 to RM5.008 on 20 November. I will interpret the
data for green candlestick on 13 July 2020. On that day, the opening price is RM5.211 and close at
RM5.271. The highest price of the stock increased on that day was amounted to RM5.301. As for the red
candlestick, I will interpret the data on 18 August 2020. The opening price was RM5.023 and close at
RM4.940. On that day, the price increases to RM5.075. The level of support is where the price stop
dropping and bounces back up, while resistance level is where the price usually stops arising and falls
back down. Based on the chart, the support line for Maxis Berhad is RM5.316 and resistance line is
RM4.910. Lastly, volume refers to the number of security shares that are traded. Company has a volume
of traded shares of 11,455 on 31 Dec 2020.

Technical Indicators
Moving Averages: Short-term and long-term, Envelopes, Bollinger Bands

Technical indicators are mathematical formulas based on the security or contact price, volume or open
interest used by traders. Technical analyst usually uses metrics to forecast future market changes by
analysing historical data. Based on the figure 2, it shows the 10-month Maxis Berhad which is from July
2020 to December 2020. Moving average is commonly used technical analysis indicator. It eliminates the
impact of fluctuations in short-term prices, smoothest out the market history accordingly and offers a
summary of the average price in the form of a single line for a specific period. The blue line indicates
moving average for short-term while red line is for long term average. On 9 November 2020, the moving
average shows a downtrend which indicates there is decreasing the price of the stock. Envelopes
indicator is a method to identify a trading range’s upper and lower bands. When the price reaches or
cross the upper band, it considered overbought. While, buying a signal when the price crosses the lower
band can be considered as oversold. Bollinger bands is used to compare the volatility and relative price
levels over a specified period of time. If the price of a stock is between the upper and lower bands, we will
buy a stock and sell the stock when it touches the upper band.
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Momentum Indicators
Rate of Change (ROC), Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD),
Stochastic

Rate of change is used to describe the percentage change in value over a defined period of time, it is also
represents the momentum of a variable. Based on figure 2, it shows the price changes from the old to the
new price today. ROC can be used to identify divergences, situation of overbought and oversold as well as
centreline crossover. The current price is divided by the price from 10 weeks ago in order to construct
the rate of change using 10-week time period. The price of 10 weeks ago for the stock is RM0.320 and
current price is RM0.500. Thus, ROC of the stock is RM0.450. Next is, Relative Strength Index. Relative
Strength Index is an indicator used in technical analysis to measure the magnitude of recent shifts in
order to determine the condition of overbought or oversold in price of the stock. Moving Average
Convergence Divergence is a trend following momentum indicator that indicates the relationship
between two moving averages of the price of a security. MACD is determined by subtracting the 26-
period exponential moving average from the 12-period of the exponential moving average. Lastly is,
stochastic. A stochastic oscillator is a momentum indicator which compares a particular closing price over
a certain period of time to a range of its value. In the stochastic analysis, if the price movement is above
80% which it crosses the 80% line, it means it overbought and can be as a sell signal due to no buyer at
that time.
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Figure 1: Technical analysis graph for FBM KLCI

Source: https://www.malaysiastock.biz/Stock-Chart.aspx
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PRICE FORECAST AND RECOMMENDATION

Short-term price forecast and recommendation

The Maxis Berhad stock technical analysis is performed for short-term (6 months) from July 2020 to
December 2020. Based on Moving average short term indicators. The target price is RM0.500. As for the
support level is RM0.450 and the resistance level is RM0.555.
In my opinion, I recommend for the investor to sell their stock when the demand is high. Investor should
wait until stock prices is lower. This is because, investor will gain much when they buy the stock at lower
prices and sell it in higher price.

REFERENCES
https://www.malaysiastock.biz/Stock-Chart.aspx?securitycode=6012&mode=1D
https://www.bursamarketplace.com/mkt/themarket/stock/MXSC