– QL Resources (QLG MK; RM3.68, BUY) – Bounced off strongly from its support channel.
– Evergreen Fibreboard (EVF MK; RM1.16, BUY) – Breakout from its wedge pattern.
– Sino Hua-An International (HUAAN MK; RM0.495, SELL) – Trapped in a downtrend channel.
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QL Resources (QLG MK; RM3.68) – BUY
FY10P/E: 11.9x, P/BV: 2.7x
• QL bounced off strongly from its support channel yesterday. On the daily chart, it seems that there is a minor resistance at RM3.70. A successful breakthrough of this level would likely push it towards RM3.85 and RM3.97 (resistance trend line) next.
• MACD has staged a positive crossover and it is still rising. This reflects the positive tone on QL. However, as RSI is now overbought at 84, expect volatility to be on the rise.
• Any pullback towards the RM3.44 support channel is a chance to get in. Yet, a stop-loss at RM3.42 is a must.
QL Resources Berhad is an investment holding company. Through its subsidiaries, the company manufactures and sells fishmeal, surimi, and surimi based products, distributes animal feed raw materials, animal health products, and layer farming, and cultivates oil palm and crude palm oil milling.
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Evergreen Fibreboard (EVF MK; RM1.16) – BUY
FY10P/E: 10.5x, P/BV: 0.9x
• The stock was consolidating above the support trend line over the past few days. The breakout from its wedge pattern shows that it could still swing higher in the near-term, likely towards the RM1.23 and RM1.30 resistance levels.
• MACD is still rising. However, traders should keep stop tight as volatility could soar due to the overbought RSI.
• Traders with higher risk appetite may start to nibble now to as low as RM1.07 (support trend line). A stop below RM1.04 however is a must.
Evergreen Fibreboard Bhd. manufactures medium density fiberboard (MDF), knocked-down wooden furniture, and doors. The company, through its subsidiaries, also manufactures particle board and MDF and laminates MDF, particleboard, and plywood.
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Sino Hua-An International (HUAAN MK; RM0.495) – SELL
FY10P/E: 6.3x, P/BV: 0.8x
• The stock is still dwindling within its downtrend channel. Yesterday, it also fell below the key SMAs which are cautioned signs. Unless it can inch above RM0.53 resistance trend line soon, any near-term gains are likely to be capped.
• The easing technical landscape suggests that it may dip closer to the RM0.48 and RM0.455 support zone.
• Traders may want to lock in some profits near the RM0.53 resistance and buy back later. We see value emerging near its RM0.455 support.
Sino Hua-An International Bhd., through its subsidiary, is principally involved in the production and sale of metallurgical coke and its by-products, namely coal gas, tar, crude benzene, and ammonia sulfate. The company's main product metallurgical coke is a raw material used in the manufacture of steel.
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