– KLCI Index Futures – Underlying momentum since early September is weak.
– Crude oil futures – May build a based-pattern near US$65.
– CPO futures – Still trapped in a bearish course.
– Salcon (SALC MK; RM0.54, BUY) – Waiting for a breakout.
– Malaysian Merchant Marine (MMM MK; RM0.20, BUY) – Based-pattern seen.
– Mudajaya Group (MDJ MK; RM3.73, SELL) – Stuck in a consolidation mode.
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Salcon (SALC MK; RM0.54) – BUY
FY10P/E: 10.2x, P/BV: 0.8x
• Salcon edged above its key SMAs and test the channel resistance last Friday. This may be an early sign of more upswings ahead. Resistance is seen at RM0.565-RM0.575 and RM0.61.
• Technical landscape is improving. MACD is about to turn positive while the RSI is rising towards the upper band of the neutral zone.
• Traders may start to nibble now to capitalise on this uptrend rally. However, always keep stop tight if it breaks below RM0.52.
Salcon Berhad designs, builds, operates, and maintains municipal potable water, sewerage, and industrial waste water facilities. The company also designs, builds and commissions palm oil mills, as well as provides mechanical and electrical engineering services for general industries and investment holding.
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Malaysian Merchant Marine (MMM MK; RM0.20) – BUY
FY10P/E: N/A, P/BV: N/A
• The stock has been holding firm above RM0.185 over the past few months. Hence, we think there is little risk to the downside. The resurgent buying interest could see the stock climb to retest RM0.22 and possibly even the August highs of RM0.26.
• After recent consolidation, its technical landscape looks decent. The MACD is slowly picking up while its RSI is also rising.
• Aggressive traders may want to buy now but a stop at RM0.17 is a must, as next downside target is weaker at RM0.15 and RM0.115.
Malaysian Merchant Marine Berhad is an investment holding company which provides ship management services. Through its subsidiaries, the company provides transportation of goods by sea.
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Mudajaya Group (MDJ MK; RM3.73) – SELL
FY10P/E: 8.7x, P/BV: 4.6x
• The stock was stuck in a consolidation mode after recent spike up. Unless it can run above the 52-week high of RM3.92, we think upside is limited for now.
• MACD shows a bearish divergence while its RSI has also retraced from its peak. The immediate support is at RM3.51, followed by RM3.23 next.
• Investors may want to take some profit off the table and buy back later, preferably near the stipulated support levels. If RM3.92 is taken out, next upside target is at RM4.08 and RM4.15. Sell into strength.
Mudajaya Group Berhad is an investment holding company. The company, through its subsidiaries, provides civil engineering and building construction, leases plant and machinery, and operates property management and development. Mudajaya also manufactures concrete products, precast concrete, and building materials.
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