– Integrated Rubber Corp (IRCB MK; RM0.76, SELL) – Upward momentum saw a declining trend.
– Adventa (ADV MK; RM1.89, SELL) – Potential breakdown of a wedge pattern.
– RHB Capital (RHBC MK; RM5.44, BUY) – Keeps stop tight at RM5.39.
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Integrated Rubber Corp (IRCB MK; RM0.76) – SELL
FY10P/E: N/A, P/BV: 2.6x
• Since our buy rating on 7th Oct, the stock has rallied to a recent high of RM0.90. However, this upward momentum saw a declining trend over the past few days.
• Yesterday, the formation of a black candlestick confirmed Wednesday’s Evening Star, which suggests that the stock has now turned bearish. Traders who got in earlier may want to lock in some profits.
• Its RSI has hooked downward from its peak, indicating that follow-through momentum is likely to stay weak. Support is at RM0.72, followed by RM0.69 next. Meanwhile, near-term gains are likely capped at RM0.85.
Integrated Rubber Corporation Berhad is an investment holding company which manufactures and sells powdered and powder-free examination gloves.
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Adventa (ADV MK; RM1.89) – SELL
FY10P/E: 8.4x, P/BV: 1.5x
• The stock appears to be forming a bearish wedge pattern. The selldown over the past two days shows that a deeper correction may be underway, especially if the wedge support fails to hold.
• Its technical indicators are showing some signs of weariness. The MACD histogram bars are losing pace while its RSI has also hooked downward.
• Traders should use any chance to take profit, especially when the candlesticks edge closer to the RM1.99 resistance. Support is seen at RM1.79 and RM1.63.
Adventa Berhad is an investment holding company. The company, through its subsidiaries, manufactures and distributes sterile surgical and medical examination gloves as well as distributes medical and hospital related products. Adventa also generates and supplies energy and electricity using biomass technology.
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RHB Capital (RHBC MK; RM5.44) – BUY
FY10P/E: 10.4x, P/BV: 1.5x
• The stock is now treading at the higher band of its uptrend channel. Yesterday’s failed attempt to overcome the resistance trend line shows that strong resistance lies ahead.
• A sideways consolidation may take place over the next few days. However, as long as the candlesticks manage to hold above RM5.39, there is still a glimpse of hope that this upswing may still have legs. For now, resistance is seen at RM5.63-RM5.65, followed by RM5.90 next.
• Indicators are showing early signs of consolidation. MACD is losing some strength here while its RSI has also hooked downward. Cut losses if RM5.39 fails to hold, as a breakdown would ignite greater downward move, with next support seen at RM5.25 and RM4.96. Keep stop very tight.
RHB Capital Berhad provides commercial and merchant banking services. Through its subsidiaries, the company provides finance and leasing services, invests in properties, and trades securities. RHB Capital also provides nominee, unit trust, asset management, and insurance services.
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