Jerneh rallying on heavy volume

Jerneh is having a strong rally, with heavy volume today. It gained 51 sen to close at RM2.75 at the end of the morning session. Meanwhile, Jerneh-WA hit its limit-up price of RM1.21 as at 11.58 am (gaining 29.5 sen over Friday close). Jerneh-WA, which has an exercise price of RM1.60, commands a small premium of 2%. What sparked the strong rally? Could it be due to further development in its proposed disposal of its 80%-stake in Jerneh Insurance Bhd (JIB)?

From the chart below, we can see that the next strong horizontal resistance is at RM3.00, which could be a good level for some profit-taking. However, selling will not be easy in the face of such strong momentum, which promises higher price ahead. Maybe it is different this time as far as Jerneh is concerned, but my feeling about the present market is that a winner in this market seems to have little trouble recruiting buyers. On signs of faltering prices, the same stock will bring forth many sellers. This remains me of an old saying: Nothing succeeds as well as success, nothing recedes as fast as success. In line with this, I believe that we should progressively take profit when Mr. Market offers a good price for our stock.


Chart: Jerneh's monthly chart as at Mar 1, 2010 (Source: Tradesignum)