– Kurnia Asia (KUAB MK; RM0.51, SELL) – Resistance underway.
– Scomi Group (SGB MK; RM0.635, BUY) – Based-building pattern seen.
– Green Packet (GRPB MK; RM0.85, BUY) – Broke out of its downtrend channel.
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Kurnia Asia (KUAB MK; RM0.51) – SELL
FY10P/E: 11.3x, P/BV: 9.3x
• The recent rally lifted Kurnia Asia’s share prices closer to its resistance channel. As reflected in its daily chart, the doji pattern may indicate that buying momentum has weakened.
• In view of the limited upside potential, traders might do well taking some profits near the RM0.535 resistance. However, a successful retest of RM0.535 would confirm a breakout, and likely to push it towards RM0.595.
• Sell into strength for now, preferably near the stipulated resistances. Although indicators are still pointing up, we opine that a consolidation phase is likely to take place soon. Investors may start to accumulate when it retraces towards the RM0.495 and RM0.465 support levels.
Kurnia Asia Bhd, through its subsidiary, underwrites general insurance. The company underwrites automobile insurance as well as other insurance through a network of agents across Malaysia.
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Scomi Group (SGB MK; RM0.635) – BUY
FY10P/E: 8.5x, P/BV: 0.7x
• On the daily chart, it appears that Scomi is building a based formation. With its key SMAs also turning sideways, we expect it to trade range-bound over the near term, with resistance seen at RM0.665 and RM0.73.
• It is currently trading near its lower trend line. Therefore, there could be some scalping opportunities. Risk takers may start to nibble now, hoping for an upswing towards the stipulated resistance levels.
• However, as the indicators are still weak, a stop below RM0.57 is a must. Immediate support is at RM0.625-RM0.60.
Scomi Group Berhad is an investment holding company. Through its subsidiaries, it sells drilling mud and chemical products, provides drilling fluids materials, equipment, and services, manufactures and fabricates road transport equipment and material handling equipment, operates marketing agent for road transport equipment, and provides leasing on motor vehicles.
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Green Packet (GRPB MK; RM0.85) – BUY
FY09P/E: N/A, P/BV: 1.5x
• The stock broke out of its downtrend channel and is now trading above its key SMAs. As the 30-day SMA has also cut above the 50-day SMA, believe it is poised for more upside gains.
• Indicators are slowly picking up. RSI is rising towards the upper band of the neutral zone while MACD is also positive. If the RM0.91 resistance is taken out, next upside target is at RM0.98 and RM1.03.
• Any pullback towards the RM0.80 and RM0.775 support zone is an opportunity to accumulate. Cut loss however if it breaks below RM0.725.
Green Packet Bhd develops mobile Internet infrastructure. The company provides a range of software solutions for secure network access, WLANcellular integration, intelligent roaming, and instant community networks. Green Packet serves carriers, enterprises, wireless Internet service providers, and device manufacturers through partnerships, pilots, and trials.
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