Daily Star: TOMYPAK (7285.KL)

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Before we started to introduce our daily star, we would like to inform you that this stock was delicately selected from the screens of Cup with Handle and MACD upward crossover (Bullish). You can find the tables after clicking the links:Cup with Handle, MACD upward bullish crossover

Business Background: Established in 1979 and listed in 1996, Tomypak Holdings Berhad was one of the leading converters for flexible food packaging materials in Malaysia. With its company based in Johor, Tomypak’s products mainly covered the packaging for consumer products, including sauces, beverage, noodles, snacks, pet food, detergent and many others.

The image below showed Tomypak’s main clients:

In this post, KLSE Stockpick will analyse this stock based on technical analysis and chart pattern formed.

1. Tomypak experienced a stock hike from March 2015 to November 2015 with a price gain of 136%. And its high was at 2.362. A significant volume of shares was translated at its high in November 2015, followed by a downtrend till October 2016. The price dropped till 1.59 before another uptrend started.

2. Currently, the stock price was traded at 2.33 per share, which is almost reaching its old high (2.362) in November 2015 as mentioned in point 1. From the image above, we can observe that a cup with handle is in making. Cup pattern was formed without a proper handle. It is interesting see what will happened for its next quarter result that is expected to be rolled out at the end of this month (May 2017).

3. By looking at chart with short time frame (Image below), we can observe that MACD upward crossover happened 3 days ago. And the MACD is now trading in the positive territory which is positive for price growth. The 60-day weighted moving average is still moving upward and remains intact.

Conclusion: After checking the chart pattern and technical analysis, we noticed that Tomypak has potential to be a growth stock in future to break its old high in November 2015. However, as new quarter result is coming out around the corner and the handle for Cup with Handle is not yet formed, we suggest that investors/ traders wait to watch the stock movement in the near term.

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