– Unisem (UNI MK; RM1.53, BUY) – Downside risk is limited.
– Three-A Resources (TARE MK; RM1.38, BUY) – 50-day SMA holding well.
– EP Manufacturing (EPMB MK; RM0.43, BUY) – Holding above strong support.
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Unisem (UNI MK; RM1.55) – BUY
FY10P/E: 9.1x, P/BV: 0.9x
• The stock appears to be consolidating in a triangle pattern. As a triangle is a continuation pattern, we expect prices to kick on higher from here.
• MACD is about to move above its zero level soon while its RSI is pointing north. Prices need to breakout above RM1.59 on strong volume to confirm that another short term rally is underway. The next resistance is seen at RM1.74and RM1.80.
• As long prices do not fall below RM1.44-1.48, we believe that this triangle pattern holds and prices could head on higher from here. However, if prices fall below RM1.44, then another corrective pattern is taking place with a deeper pullback.
Unisem (M) Berhad manufactures semiconductor devices. The company provides turnkey solutions to its customers in wafer grinding, packaging and testing of integrated circuits, tape and reel, and dropship services. Unisem also provides packaging and testing wide range of leadframe packages.
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Three-A Resources (TARE MK; RM1.38) – BUY
FY10P/E: N/A, P/BV: 4.7x
• Since our take profit call (see 5th Nov issue), prices have fallen to a low of RM1.21, below our targeted RM1.29 levels. The stock held above its 50-day SMA and its 38% FR levels, and has since rebounded slightly from that level.
• It seems like the 50-day SMA is a good support for the stock. Only aggressive traders should take a long position on any weakness. Keep a stop below RM1.21.
• Technical indicators are improving but have yet to turn positive. So, we cannot discount another pullback to retest the RM1.21 lows again. If prices hold steady at those levels then, we can be more confident in calling an outright buy. Trade cautiously on the buy side.
Three-A Resources Berhad is an investment holding company. The company, through its subsidiaries, manufactures liquid caramel, caramel color, NFV, HVP, soya protein sauce, glucose syrup, and maltose syrup.
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EP Manufacturing (EPMB MK; RM0.43) – BUY
FY10P/E: 8.4x, P/BV: 0.4x
• EPMB is gyrating near the lower end of its descending triangle pattern. This makes the stock a low-risk buy near the current level.
• The RM0.415 support was tested three times in the past 2 months and every time, prices rebounded from that level. That makes this support a strong one.
• However, a break below the RM0.415 support would make us doubt the sustainability of this uptrend from here. Traders may want to keep a stop below this support.
EP Manufacturing Berhad is an investment holding company. Through its subsidiaries, the Company manufactures engineering plastic products, moulds, dies, and bicycles. EP Manufacturing also assembles lamps and switches, and markets bicycles.
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