– SAAG Consolidated (SAAG MK; RM0.18, SELL) – Strong resistance ahead.
– AirAsia (AIRA MK; RM1.34, BUY) – Likely found a temporary bottom.
– AE Multi Holdings (AEM MK; RM0.425, SELL) – Unload on strength.
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SAAG Consolidated (SAAG MK; RM0.18) – SELL
FY10P/E: 9.0x, P/BV: 0.7x
• The uptrend from March reached a new 52-week high of RM0.395 on 14th May and has been falling since. Upside potential is likely capped by its key SMAs, which had been tested for couple of rounds. Sellers at these resistances would likely keep the bulls at bay.
• MACD remains negative while its RSI is still below the 50-mark. To negate this downtrend, it must inch above the RM0.20 level (also its 50-day SMA) before it could swing higher towards RM0.225 next.
• Until the breakout happens, we would stay with the bears’ camp. It appears that follow through momentum will remain weak and prices may fall back to test the RM0.17 lows again. A break below this level would drag SAAG towards RM0.14 next.
SAAG Consolidated (M) Berhad is an investment holding company. Through its subsidiaries, it supplies engineering equipment and spare parts to gas and petroleum industry and provides engineering and construction works. SAAG Consolidated also supplies information technology services and equipment.
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AirAsia (AIRA MK; RM1.34) – BUY
FY10P/E: 6.7x, P/BV: 1.4x
• Instead of heading south, AirAsia managed to build a based-pattern after our sell rating on 25th Nov, suggesting that the stock may have found a temporary bottom. The recent breakout from its downtrend channel also proves that a recovery is in sight.
• Technical landscape shows encouraging signs. MACD is now positive while RSI is also rising. As long as prices hold steady above the RM1.31 resistance-turned-support trend line, its uptrend remains intact. Next resistance are RM1.40 and RM1.48.
• Risk takers may join the buying bandwagon but remember to put a stop at below RM1.29. Once this cut loss point is triggered, its next supports are RM1.20 and RM1.10.
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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AE Multi Holdings (AEM MK; RM0.425) – SELL
FY10P/E: N/A, P/BV: 1.4x
• AE Multi is gyrating in a rising wedge pattern, suggesting that the recent rally is maturing. However, we do not discount the possibility of another upleg to re-test the recent highs of RM0.51, though we think it is a low probable scenario at this moment.
• We are cautious about the sustainability of this uptrend as its indicators are pointing to more downward pressure. MACD histogram bars are losing a bit of strength here while its RSI has also fallen a tad lower.
• A break below the RM0.39 support trend line would confirm our bearish stance on the stock. If this level is violated, next downside targets are RM0.34 and RM0.325. Unload on strength.
AE Multi Holdings Berhad is an investment holding company. Through its subsidiaries, the company manufactures printed circuit boards and provides waste water treatment facilities and waste water recycling services. AE Multi also processes chemicals.
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