– Malaysian Resources Corp (MRC MK; RM1.33, SELL) – Sell into strength.
– Kinsteel (KSB MK; RM1.02, BUY) – Bounced off strongly from support channel.
– IJM Corporation (IJM MK; RM4.81, SELL) – Signs of weariness.
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Malaysian Resources Corp (MRC MK; RM1.33) – SELL
FY10P/E: 25.6x, P/BV: 1.9x
• Despite numerous attempts, the stock failed to inch past the resistance trend line, suggesting that it is still trapped in a downtrend channel. Yesterday, the candlesticks also fell below its key SMAs.
• Although it is possible that the candle may retest the RM1.42 resistance trend line, we think such effort is futile due to its easing technical landscape.
• Traders should do well selling into strength, preferably near the RM1.42 resistance. Support is seen at RM1.25 and RM1.16.
Malaysian Resources Corporation Berhad is an investment holding company. Through its subsidiaries, the company 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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Kinsteel (KSB MK; RM1.02) – BUY
FY10P/E: 8.6x, P/BV: 1.2x
• Kinsteel bounced off strongly from its support trend line yesterday. We may see further re-rating on the stock as its candlestick also edged above the key SMAs.
• MACD has turned positive while RSI is also rising towards the upper band of the neutral zone. If yesterday’s high of RM1.05 is taken out in the early going, RM1.10 is the next target, followed by RM1.18 next.
• Any pullback is an opportunity to accumulate. However, always keep stop tight at RM0.935 (support trend line) as next downside targets are distanced away at RM0.875 and RM0.815.
Kinsteel Berhad is an investment holding company. The company, through its subsidiaries, manufactures and trades steel bars and related products. Kinsteel also operates in property investment.
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IJM Corporation (IJM MK; RM4.81) – SELL
FY10P/E: 19.8x, P/BV: 1.3x
• Previous failed attempts to move above the resistance channel shows that strong resistance lies ahead. Further gains are likely to be capped at RM5.04.
• Technical indicators are showing some signs of weariness. MACD is poised for a negative crossover while its RSI has also hooked downward.
• Although we are cautiously bullish about its medium-term outlook, we see opportunities to take some profits now and buy back later. Value should emerge closer to the RM4.45 support.
IJM Corporation Berhad is an investment holding company that provides construction services. The company, through its subsidiaries, operates in property development, provides quarrying services, manufactures and sells premix products, cultivates oil palm, and provides education services.
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