MORNING CALL 20 April
2012
FLOWS;
BUYS: Dialog,
Maybank, JCY
SELLS: TNB,
UEMLand, YTLC
Technical Stock Alert;
1) MRCB (RM1.71) - its price has depreciated by 25% from
its year high of RM2.27 set in early Feb. RSI now at its historical low end of
21. Its break down below its earlier head and shoulder formation indicates a
low end target of RM1.60 which has almost been achieved hence we recommend to
begin accumulation at these levels. A move back up above the RM1.80 levels
would indicate a short term trend reversal against the current down channel and
possibly a medium term target of RM1.95. We take comfort that its strategic
major shareholder has not reduced its stake during the recent sell off. We understand the redevelopment of the 1,215 ha Rubber Research Institute (RRI) land in Sungai
Buloh has received approvals for land conversion from agricultural to
commercial/residential and tenders could still be on track in June with MRCB a
leading contender to get a large slice of the cake. Trading BUY.
2) E&O (RM1.42) - Recent price retracement has
violated its small triangle formation between RM1.59-RM1.48. The breakdown
indicates an immediate downside risk of RM1.37 and a possibly a lower target of
RM1.29. The stock could also be affected
by the Penang Government intention to raise the minimum price for foreign
purchases of landed properties in the state from the current RM500,000 to
RM1mil in the mainland and RM2mil on the island respectively to protect local
interest as its largest development is Tanjong Tokong in Penang Island valued
at RM1.4bn. Sell into bounces.
(DN/AL)