Broker's Call - 20 August 2009

Broker's Call - 20 August 2009: .
– RCE Capital (RCE MK; RM0.665, SELL) – Likely to have formed a ‘Double Top’ formation.
– Jaks Resources (JAK MK; RM0.84, SELL) – Broke below the uptrend channel.
– Multi-Purpose Holdings (MPU MK; RM1.87, SELL) – Trapped in a bearish rising wedge.
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RCE Capital (RCE MK; RM0.665) – SELL
FY10P/E: 6.3x, P/BV: 1.5x

• On the daily chart, it appears that RCE has formed a ‘Double Top’ formation. Recent pullback from RM0.745 suggests that the stock has probably peaked for now. We expect the 30-day SMA (RM0.63) to be tested soon. If this level fails to hold, next downside target is at RM0.59.
• MACD is about to hook downward while its RSI has also retraced from the overbought territory. The medium-term uptrend channel could be overturned should the candlesticks fall below the channel support.
• Any rebound towards RM0.70 is an opportunity to lock in profits. Unless it can surpass RM0.745, we advocate investors to sell into strength.

RCE Capital Berhad is an investment holding company which provides management services. Through its subsidiaries, the company invests in property, provides information technology, financial administrative, loan financing, broadcasting and advertising media services. RCE Capital is also involved in general trading, licensing and merchandising activities.
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Jaks Resources (JAK MK; RM0.84) – SELL
FY10P/E: 12.7x, P/BV: 0.8x

• The recent pullbacks dragged the stock below its uptrend channel as well as its key SMAs. These are negative signs and could mean more downswings ahead. There is a minor support at RM0.82, followed by RM0.765 and RM0.735.
• Technical landscape is still weak at this juncture. MACD histogram bars have turned negative while its RSI is also skidding towards the lower band of the neutral zone.
• Although there could be some technical rebounds to challenge the supportturned- resistance trend line at RM0.94, traders should do well selling into strength as such rebounds would likely be short-lived.

Jaks Resources Berhad is an investment holding company. The company, through its subsidiaries, provides water supply construction projects such as reservoirs, water reticulation works, and pipe laying. Jaks Resources also manufactures steel pipes.
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Multi-Purpose Holdings (MPU MK; RM1.87) – SELL
FY09P/E: N/A, P/BV: 1.0x

• The stock is still entrenched in a bearish rising wedge pattern. If the candles fail to penetrate above the RM2.05 resistance line over the next few days, expect selling pressure to gain strength.
• For the time being, traders who bought in earlier may want to take some profits off the table as the technical landscape has turned slightly negative. Support is seen at RM1.78 and RM1.68.
• However, if the RM2.05 resistance is taken out, then it may climb a tad higher towards RM2.20. Yet, we think this probability is low at this juncture.

Multi-Purpose Holdings is an investment holding company. The company's subsidiaries' businesses include investment holding and trading, operation of general insurance businesses, provision of leasing, hire purchase, factoring and general loan financial services, operation and management of a licensed four digit numbers forecast game, hotels and securities broking and dealing.