– Genting Malaysia (GENM MK; RM2.89, SELL) – Strong resistance lies ahead.
– Axiata Group (AXIATA MK; RM3.12, SELL) – Unload on strength.
– AirAsia (AIRA MK; RM1.29, SELL) – Downtrend channel is still holding firm.
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Genting Malaysia (GENM MK; RM2.89) – SELL
FY10P/E: 14.0x, P/BV: 1.8x
• Genting Malaysia has been challenging the resistance channel over the past few days. This is its third attempts in 5 months, and may influence the price movements over the medium term.
• Previous failed attempts suggest that strong resistance lies ahead. Yesterday’s black candle also shows that traders are taking the opportunity to lock in profits after a decent rally.
• Unless it can break past the recent high of RM2.95-RM3.02 zone, any rebound is a chance to sell. There is a minor support near its key SMAs but a stronger support is at RM2.72-RM2.69 support levels. Sell into strength.
Genting Malaysia Berhad operates a tourist resort in Genting Highlands which includes hotels, restaurants, casinos, and recreational and amusement facilities. Through its subsidiaries, the company also develops and leases property, operates leisure and hospitality services, and provides time share ownership scheme.
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Axiata Group (AXIATA MK; RM3.12) – SELL
FY10P/E: 16.5x, P/BV: 1.6x
• Axiata fell below its uptrend channel recently but prices were supported at the RM2.90 level. A technical rebound stepped in thereafter and lifted the stock to current levels, a tad above its key SMAs.
• Its technical indicators continue to show subdued patterns. MACD signal line is losing a bit of momentum here while the RSI has hooked down from its recent highs.
• Any rebound towards RM3.17-RM3.26 resistance levels should be seen as an opportunity to sell. Closing below RM3.06, its 30-day SMA would likely push selling pressure into a frenzy mood. Next support is weaker at RM2.90 and RM2.72.
Axiata Group Berhad is a telecommunication company. The company's main activities are the establishment, maintenance, and provision of telecommunications and related services.
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AirAsia (AIRA MK; RM1.29) – SELL
FY10P/E: 6.5x, P/BV: 1.4x
• AirAsia is still trapped in a downtrend channel. The correction tone, which started back in Aug, is holding firm, suggesting that its recent run-up is probably coming to a temporary end soon.
• Indicators are showing signs of improvement but may not be sufficient to lift the candlesticks above both its key SMAs and the trend line resistance. Any near-term gains are likely capped at RM1.35-RM1.48.
• Although we do not discount the possibility of another upleg towards the stipulated resistances, we prefer to sell on strength rather than buying at current levels. Closing below RM1.22 would derail the stock towards RM1.15 next.
AirAsia Berhad provides low-cost air carrier service. The company provides services on short-haul, point-to-point domestic and international routes. AirAsia operates from hubs in Malaysia, Thailand and Indonesia.
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