Keuro broke above its downtrend line!

Keuro has a train to catch. Despite the turmoil of the past 2 weeks, Keuro has been rising after breaking above its strong horizontal resistance at RM0.51-52. This morning, it has been testing its long-term downtrend line resistance at RM0.77-78. As at 11.55am, it traded at RM0.795, which means that it has just surpassed that downtrend line. The next resistance will be the horizontal line at RM0.85 & then the psychological resistance at RM1.00.

The only significant announcement made by Keuro is that it had disposed of 134,925,600 ordinary shares, representing 5.21% of the shares capital of Talam Corporation Berhad between 9 March 2010 and 12 May 2010.


Chart: Keuro's week chart as at May 26, 2010 (Source: Tradesignum)

Keuro had received a notification dated 24 May 2010 from Tan Sri Dato’ (Dr) Ir. Chan Ah Chye @ Chan Chong Yoon, its President/Chief Executive – Executive Director that he intends to deal in the securities of the Company (go here). Chan Ah Chye has direct & indirect interest in 143.6 million shares of Keuro. I think it is very likely that he is planning to sell into the current sharp rally.

While the upside breakout above the downtrend line should be viewed as a bullish development, this breakout came after a sharp rise of more than 50% over the past 4 days. Any trade based on this breakout could be a risky proposition. A failure to stay above the breakout level could lead to a sharp correction. Avoid Keuro despite the bullish breakout. If you have position in Keuro, sell if it failed to stay above RM0.78.