Avoid Stock with Weak Background - Gamuda Bhd (5398.KL)
Earlier September, we do share why you must avoid stock with weak background by using DRB-Hicom as case study.
What is weakness?
In Volume Spread Analysis, weakness referring to the hidden potential selling such as Up-Thrust, No Demand and Sell-Off. Up-Thrust and No Demand usually happened during distribution stage and follow by Sell-Off which is the confirmation signal of distribution and the beginning of mark-down stage.
Based on Gamuda daily chart above, we have spotted some of the earlier weaknesses at the background:
1. No Demand (Jan 18) and Up-Thrust (April) signal at resistance level
2. Confirmation of distribution and the beginning of mark-down stage with the Sell-Off signal on 14 May 2018 with huge volume
3. Further distribution spotted again during re-distribution level at resistance level. Price unable to break above RM3.97 with few weaknesses (UT)
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