– Sime Darby (SIME MK; RM8.95, SELL) – Uptrend ended?
– Mudajaya (MDJ MK; RM4.60, SELL) – Double close key reversal
– Supermax (SUCB MK; RM4.07, SELL) – Final rally? Dow Jones 10,450.95
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Sime Darby (SIME MK; RM8.95) – SELL
FY10P/E: 19.3x, P/BV: 2.5x
• Sime fell below its rising wedge pattern support recently but finding some support above the 30-day SMA. The underside of its rising wedge support-turned-resistance is now at RM9.16 would likely keep upside capped. The following resistance is at RM9.40.
• The sell signal on its MACD and is RSI remains in play. Very clear bearish divergence signals on both indicators also support the view that the stock may have topped. Furthermore, the RSI is now at its lowest point in 4- months, which suggests that selling momentum is already on the rise.
• Any rebounds towards the said resistance should be seen as a chance to sell. Closing below RM8.78, its 50-day SMA would likely push selling pressure into a more frenzied mood. Strong support seen at RM6.80 while RM8.20 is a minor support.
Sime Darby Berhad is an investment holding company. The Group's principal activities include plantations, property development, heavy equipment and motor vehicle distribution, and energy and utilities.
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Mudajaya Group (MDJ MK; RM4.60) – SELL
FY10P/E: 9.2x, P/BV: 5.0x
• Mudajaya appears to have formed a bearish wedge pattern. It is still holding above its wedge support but yesterday close saw a double key reversal pattern formed. A sign of warning perhaps.
• The bearish divergence on its RSI indicator is also another warning. If prices close below the RM4.54 wedge support then we would likely see further selling on the stock. The 19th Nov gap of RM4.48-4.55 is now the key support.
• There appears to be a clear 5-wave rally to yesterday’s high of RM4.82. Our sell call is premised on this high that should not be taken out. If prices do take it out, then it could test RM5.00 next. Downside, a break below RM4.48 could push prices towards RM4.13 (16th Nov low) and even RM3.75-3.80 (its MAs).
Mudajaya Group Berhad 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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Supermax (SUCB MK; RM4.07) – SELL
FY10P/E: 8.1x, P/BV: 2.1x
• Supermax continued to rally to a new 52-week intra-day high of RM4.11 yesterday but we believe that this is the final leg up given that trading volume was been weaker in the current rally since the stock found a short term bottom at RM3.38 (5th Nov).
• Indicators are undoubtedly positive but have potential to form bearish divergence signals just like volume. RSI is now overbought as well. Longer term players ought to start looking for bearish signs to unload.
• Resistance is at RM4.20-4.25 but prices could even head higher. Aggressive traders may want to take a position here but keep stops very tight. We, however, prefer to sell on strength, closer to its resistance, rather than buying at current levels. Closing below RM3.80 would confirm that the uptrend has ended.
Supermax Corporation Berhad is an investment holding company whose subsidiaries manufacture, sell, and export various type of latex gloves around the world.
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