– Alliance Financial Group (AFG MK; RM2.63, BUY) – Selling appears to be tapering off.
– Malaysian Resources Corp (MRC MK; RM1.34, BUY) – Trying to breakout of its triangle pattern.
– UMW Holdings (UMWH MK; RM6.35, BUY) – Bulls showed their hands.
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Alliance Financial Group (AFG MK; RM2.63) – BUY
FY10P/E: 15.0x, P/BV: 1.4x
• The stock has fallen into our targeted support band of RM2.50-2.60 since our sell call on the stock (see 26th Nov issue). At current levels, we are seeing that selling interest is starting to taper off after hitting a recent low of RM2.57. It is now holding just above its previous breakout level of RM2.60.
• We think that the stock looks appealing now on a risk-reward basis. Traders may want to buy now with a stop place below RM2.56.
• With its indicators remaining in an improving trend, the stock could soon kick on higher from here. Once this consolidation phase ends, prices could climb to test RM2.79 and even the recent highs of RM2.95 next.
Alliance Financial Group Berhad is an investment holding company. Through its subsidiaries, the company has operation in commercial and merchant banking, provides financing and nominee services, and invests in property. Alliance Financial also operates and manages a golf resort, manages unit trusts, and provides trustee services.
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Malaysian Resources Corp (MRC MK; RM1.34) – BUY
FY10P/E: 22.7x, P/BV: 1.8x
• Despite numerous attempts, the stock failed to inch past the triangle resistance. Prices, however, is trying to climb back above its key SMAs.
• With both indicators starting to show signs of life, there is a good chance that prices can push on from here. Only aggressive traders should take a long position here. The more risk-averse investors should only buy on breakout above the RM1.35 resistance.
• Traders and investors alike should keep a stop loss position below RM1.26 just in case. A breakout rally could lift prices towards the August highs of RM1.51 and possibly even RM1.63.
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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UMW Holdings (UMWH MK; RM6.35) – BUY
FY10P/E: 14.1x, P/BV: 1.9x
• UMW broke out of its consolidation triangle and also its moving averages yesterday. With the breakout, we think that the bulls have shown their hands. The momentum is now likely in the bulls’ camp.
• Traders should buy now to ride on this breakout wave. Stop loss below RM6.27 is still a must.
• The MACD is starting to rise further away from the zero levels while its RSI has hooked upwards. Both indicators are supportive of further upside for the stock.
UMW Holdings Berhad is an investment holding company which, through its subsidiaries, trades and manufactures light and heavy equipment for industrial, construction, and agricultural sectors. The Company also imports, assembles, and markets passenger and commercial vehicles and related spare parts. UMW provides after-sales, financing, and insurance services as
well.
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