(Post date : 26 August 2010)

Kossan Rubber Industries Bhd, an investment holding company, manufactures and sells rubber products primarily in Malaysia. The company offers various gloves for use in the home care, surgical procedure, medical examination, dental care emergency/high risk, diagnostic and laboratory, chemotherapy, and industrial markets. It also provides molded and extruded rubber products for use in automotive, industrial, pipe seals and gaskets, and construction and civil engineering applications; engineered rubber products, such as marine dock fenders, bridge expansion joint systems, rubber bearing pads, rubber water stops, and compression seals; colored EPDM granules for athletic running tracks, playgrounds, walkways, and commercial surfaces; and rubber rolls for paper and printing industries, steel rolling mills, textiles industries, and plywood factories.

In addition, the company offers EVA sheets; and PU products, such as rollers, precision articles, and tubing sleeves and robs, as well as engages in the fabrication and installation of machinery, and trading of latex examination gloves. It also exports its products to the United States, Asia, and Europe. The company was founded in 1979 and is based in Klang, Malaysia. Kossan Rubber Industries Bhd operates as a subsidiary of Kossan Holdings (M) Sdn. Bhd.

Kossan stock has been in long term bullish trend since last year March, where it started from the low point about RM1.40 and rally until the highest point at about RM4.28 in July 2010. After this highest point, the long run bullish trend has started to slow down, but NOT yet confirm it is going downward for a short term or for a long term perios? Current stock price has not reached the 38.2% retracement about RM3.18 yet, and it has just moved below the 200 days moving average line on te 26th August 2010. But it is not far from the 200 days MA, it just closed below the line. And the stock price is currently in between the 23.6% retracement at about RM3.60 and the 38.2% retracement about RM3.18.

From here, we got two points, stock price has not closed below the 38.2% retracement level and has not gone far below from the 200 days MA. So, according to the technical analysis, it has not confirmed yet the near term direction as if it will go up for short while or going down for a longer period? Conclusion, the long term bullish trend is not confirmed, but investors got to be cautious. If the stock price close at the price much lower than 200 days MA and touch the 38.2% retracement level line or closed below this retracement level, it will be more confirm that the stock price is heading downward in coming quarters. Beware of this as there is no a single stock that will always in uptrend for a very long period of time. If the stock price goes below the 38.2% retracement level, investors should sell off all their stocks and protect their profit? Or should sell off now in August 2010 before it going downward in future?

As from the chart, the next nearest retracement line is at 50% retracement, at about RM2.84 and the following 61.8% retracement is at RM2.50. The 61.8% retracement level, is a better and stronger support line compared to the 50% retracement level. So, it is hard for the investors to believe that the stock price will heading to this level, but as we all know there is nothing impossible in the stock market, although we wish that this will not happen. Always remember, any price is possible for any stock in stock market.

KOSSAN RUBBER INDUSTRIES BERHAD

New Straits Times, Jun 23, 2010 | by Zaidi Isham Ismail

RUBBER glove maker Kossan Rubber Industries Bhd will spend RM60 million in the next two years to expand its operations in Klang, Selangor.
The plans include two new plants, increasing production lines, buying new machinery, upgrading existing equipment and boosting research and development.
Kossan managing director and chief executive officer Lim Kuang Sia said the new plants on 8ha near its existing factory will help meet increasing world demand in addition to producing high-end rubber gloves for the premium market.

"The expansion is also part of our plans to reduce our dependency on foreign workers, beef up automation and innovation, boost productivity and reduce cost," Lim told reporters after Kossan's annual and extraordinary general meetings in Kuala Lumpur yesterday.

He said the first plant will be completed by October, while the other will be ready by next year, bringing Kossan's number of plants to 12, producing 14 billion pieces of gloves a year, or some 14 per cent share of the world's rubber glove market.

Lim also said that Kossan, among the top five rubber glove producers in the country, will launch a new range of glove products for high-end markets like the US, Europe and Japan, as well as emerging markets like China.

Plans to set up its first overseas plant either in Indonesia, Vietnam or Thailand are still being considered.

"This is part of our ongoing expansion plans and we are looking at all possible locations in these countries. We have not decided on the timing of the move and will be cautious and prudent," Lim said.

On another front, he said the firm was open to mergers and acquisitions, but was carefully assessing the offers on its plate.
"If the offer creates value and is at the right price, we might take it."