– Malaysian Resources Corp (MRC MK; RM1.29, SELL) – Still below its moving averages.
– Petra Perdana (PETR MK; RM2.49, SELL) – Potentially more downside to come.
– Oilcorp (OILC MK; RM0.415, BUY) – Triangle breakout.
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Malaysian Resources Corp (MRC MK; RM1.29) – SELL
FY10P/E: 27.5x, P/BV: 1.8x
• The stock’s uptrend since January is still intact, barely. Prices are currently sitting just above its channel support at RM1.27-1.28. A firm break below this support would signal the end of its uptrend.
• Furthermore, it is trading below its moving averages. Both of its indicators show negative divergences. There is also a small chance that a double top could be forming. Investors would have to be really careful here.
• Continue to take profit on rallies as upside is likely to be capped in the near term by it moving averages at RM1.32 and RM1.38 while its middle band resistance is at RM1.50.
Malaysian Resources Corporation Berhad is an investment holding company. Through its subsidiaries, it provides construction and engineering services, multimedia, property development and management, information technology services, and independent power producer. Malaysian Resources also manufactures and sells ceramic tiles and pre-stressed spun concrete piles.
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Petra Perdana (PETR MK; RM2.49) – SELL
FY10P/E: 6.8x, P/BV: 1.4x
• The long black candles since the breakdown from its bearish flag pattern suggest that sellers are going into overdrive. A break below the RM2.40 support levels could push the stock back down towards the RM2.17 and RM2.00 support levels next.
• The indicators would be undoubtedly bearish given the two days of selling. However, its RSI has now fallen into oversold territory.
• Despite it being oversold, we still expect prices to fall further. There may be a few minor rebounds along the way. Sell on any rebound as the resistance at RM2.70 and RM2.81 is likely to cap the gains.
Petra Perdana Berhad provides engineering and maintenance services, packaging, fabrication and supplies engineered equipments. The company also has operation in information technology services for oil and gas, power generation and other heavy industries.
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Oilcorp (OILC MK; RM0.415) – BUY
FY09P/E: N/A, P/BV: 0.4x
• The stock has breached its triangle resistance yesterday on strong volume. It needs to take out the moving averages, currently at RM0.42 before the bulls can take control again. If successful, the stock could climb to retest RM0.50 again next.
• Both indicators are supportive of the positive breakout. The MACD is about to confirm its golden cross while its RSI has just moved above its resistance trend line.
• For now, aggressive traders may want to buy now but place a stop just below the triangle support at RM0.38-0.39. Get out quick if this support breaks down.
Oilcorp Berhad is an investment holding company. The company, through its subsidiaries, provides engineering services to oil and gas, petrochemical, power generation, and semiconductor industries. Oilcorp also provides property development and investment as well as operates resort.
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