Monday, July 23, 2012

Morning Call | 23 July 2012

MORNING CALL                                       23 JULY 2012

FLOWS;

BUYS:  E&O, Axiata, JCY

SELLS:  MRCB, TNB, PCHEM
 
Technical Stock Alert;

DRBHICOM (RM2.73) -   its price has surpassed our trading target of  RM2.68 since our initial buy call in April on the back of expectations of VW acquiring a strategic stake in Proton. However the ongoing bleeding in Lotus requiring further cash injections by March 2013 could delay possible negotiations. RSI is showing initial signs of turning down at 68 but MACD still neutral. We advise client to begin trimming positions with a possible pullback to around the RM2.54 levels.

ALAM (RM0.53) - The market continues to ignore the company's improving fundamentals as it trades close to its 52 week low of RM0.495. RSI remains below neutral levels at 43.8 and MACD flat.  Its recent trend of diversifying away from the saturated AHTs space and improving order book should see the company post stronger 2H numbers. Immediate upside resistance at RM0.58 and RM0.68. Accumulate.