GAMUDA: Bonus Issue Unlocks New Technical Strength
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Overall Technical Verdict:
The chart shows strong bullish momentum supported by multiple moving averages and a broad upward trend. However, the mild bearish signals from MACD and declining volume slightly reduce the setup quality, making it more vulnerable to a short-term correction.
This is a high-quality technical setup but should be monitored closely for any signs of trend reversal in the short term.
Themes of the stock:
Infrastructure Development – Major player in large-scale transportation and public infrastructure projects.
Regional Expansion – Expanding footprint beyond Malaysia, particularly in Southeast Asia and Australia.
Bonus Issue Play - The company has just announced a 1-for-1 bonus issue yesterday. Usually, share price reacted positively in the next 1-3 months.
Company Background:
Gamuda Berhad is a leading Malaysian infrastructure and property development company, specializing in large-scale engineering and construction projects, property development, and water and expressway concessions. Its key projects include highways, rail systems, and township developments.
Details of Technical Indicators:
Bollinger Bands: The price action is currently near the upper band, which indicates overbought conditions, but the bands are widening, suggesting higher volatility and potential further upside.
Moving Averages (MA):
The stock is above key moving averages (20, 50, 150, and 200-day), which suggests a strong bullish trend.
The 200-day MA at 5.64 MYR is far below the current price (8.01 MYR), confirming a long-term uptrend.
The 50-day MA is acting as a support level.
Volume:
Volume has decreased since the spike in early August, which could indicate weakening momentum, although the uptrend is still intact.
MACD:
The MACD line is slightly below the signal line, showing a mild bearish crossover. This suggests possible short-term weakness or consolidation before further potential movement upward.
Trend & Price Action:
The price has broken out of a consolidation pattern in mid-June, which led to a strong rally.
The longer-term trend is bullish, but near-term risks (as indicated by MACD and decreasing volume) suggest a need for caution.