Highlights

RHB Retail Research

Author: rhboskres   |   Latest post: Thu, 9 Jul 2020, 6:29 PM

 

FCPO - Bearish Bias Stays

Author: rhboskres   |  Publish date: Tue, 14 Jul 2020, 6:17 PM


Maintain short positions while revising trailing-stop higher. The FCPO gained MYR48 to close at MYR2,407– trading ranged between MYR2,381 and MYR2,409. The closing level placed the commodity above the previous immediate resistance of MYR2,390 and slightly above the MYR2,400 round figure. However, we believe the commodity’s correction phase remains incomplete. Towards the downside, we are taking the view that 30 Jun’s low of MYR2,293 is likely to be tested. Hence, we are keeping our negative trading bias.

We advise traders to stay in short positions. We initiated these at MYR2,359 – the closing level of 7 Jul. To manage risk, we revise our stop-loss higher, above MYR2,450 – to account for potential price volatility ahead of data to be released on Friday.

We revise the immediate support to MYR2,380 – near the latest low. This is followed by MYR2,335 – the low of 3 Jul. Conversely, the immediate resistance is now eyed at MYR2,420, which is 6 Jul’s high. This is followed by MYR2,450 – price point of 24 Jun.

Source: RHB Securities Research - 14 Jul 2020

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Comfort Gloves - Rising ASPs Lift All Boats; BUY

Author: rhboskres   |  Publish date: Tue, 14 Jul 2020, 10:13 AM


  • Upgrade to BUY from Neutral with new MYR4.80 TP from MYR3.18, and 41% expected total return. The glove shortage has worsened as COVID- 19 cases in the US surged 24% MTD. We raise our earnings estimates and TP on higher ASPs. Our TP is based on CY21F P/E of 25x, which is at a 30% discount against peer average. This reflects its smaller market cap/liquidity to peers. BUY for its FY21 (Jan) 128% earnings growth, supported by 10% ASP increase and 14% capacity expansion.
  • Glove demand estimates raised as COVID-19 cases in the US surged 24% MTD. From 8-12 Jul, the number of new cases rose to above 60,000 per day. As of 12 Jul, total new cases increased by 367,000 or 24% on a MTD basis to 3.27m. As COVID-19 cases remain high in the US, demand for gloves should stay exceptionally strong, given its importance in protecting healthcare workers. As the US is the world’s biggest glove consumer, its stubbornly high number of cases means that demand for gloves should continue to rise.
  • The glove shortage has worsened. Within two weeks, the number of new COVID-19 cases in the US increased beyond expectations. As a result, we estimate that glove demand has increased in the US, causing further depletion in global stock levels. Our estimates show that global stock levels could have declined by an additional 2% to 10.8bn pieces. This is enough for 15 days of demand (previously 15.2 days) and much lower than the prepandemic 60-day average.
  • ASP assumptions raised. Our channel checks also revealed the shortage of certain raw materials used to manufacture gloves, capping near-term supply. We increase FY21F-23F ASP assumptions by 2-7%. We estimate that the impact of the higher ASP should exceed the additional logistics costs expected from the US Food & Drug Administration’s latest import alert.
  • Capacity expansion. We expect Comfort Gloves to add six production lines in FY21. Upon completion, its production capacity will increase by 14% to 5.9bn pieces pa (ppa).
  • Upgrade to BUY. We raise our FY21-23 earnings forecasts by 49-75%. In the short term, 2QFY21 core earnings should show significant QoQ improvement as ASP is on an increasing trend. Post COVID-19, the company’s earnings growth outlook remains positive, as we expect glove demand to continue its annual 8-10% growth due to higher hygiene awareness globally.
  • Risks: Faster-than-expected global availability of effective COVID-19 vaccine, lower-than-expected sales volume/USD, and higher-thanexpected raw material prices.

Source: RHB Securities Research - 14 Jul 2020

Labels: COMFORT
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dolphin8838 Thankfully, did not sell yesterday when it reached 3.40s
14/07/2020 11:46 AM

Trading Stocks- CIMB Group

Author: rhboskres   |  Publish date: Mon, 13 Jul 2020, 10:21 PM


CIMB Group has been showing signs of developing a potential minor sideways consolidation over the past three sessions around the 21-day SMA line. An upside breach of the MYR3.74 mark could signal a positive bias, with resistance levels eyed at MYR3.88 followed by MYR4.00. A stop-loss can be placed below MYR3.68.

Source: RHB Securities Research - 13 Jul 2020

Labels: CIMB
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Trading Stocks- Advancecon

Author: rhboskres   |  Publish date: Mon, 13 Jul 2020, 10:20 PM


Advancecon formed a white candle, which crossed above the MYR0.395 resistance – this suggests a positive follow through from the recent “Bullish Harami” formation. A positive bias may emerge above MYR0.395, with resistance levels eyed at MYR0.415 followed by MYR0.435. A stop-loss can be set below MYR0.39.

Source: RHB Securities Research - 13 Jul 2020

Labels: ADVCON
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COMEX Gold - Pushing Through the Resistance Zone

Author: rhboskres   |  Publish date: Thu, 9 Jul 2020, 6:29 PM


Maintain long positions as the multi-year uptrend remains firm. Today, we are taking a look at COMEX Gold’s long-term price trend – using a weekly chart. The commodity has been undergoing a multi-year uptrend since end- 2015. The recent upward move was resumed after the commodity experienced a healthy multi-week sideways correction phase, and recently crossed above the important USD1,789.50 – USD1,806.60 resistance zone, which is a positive technical signal. This was on the back of the daily and weekly RSI readings, which are still below overbought readings. At this juncture, as long as the commodity manages to hold above the said previous resistance zone, the risk of a deeper correction setting in would still be contained. We maintain our positive trading bias.

We recommend traders stay in long positions. We initiated these at USD1,766.40, which was the closing level of 22 Jun. For risk-management purposes, a stop-loss can now be placed at the breakeven mark.

The immediate support is revised to USD1,815 – near the latest low. This is followed by the USD1,800 round figure. Towards the upside, immediate resistance is eyed at USD1,850, followed by USD1,865 – near the high of 12 Sep 2011.

Source: RHB Securities Research - 9 Jul 2020

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WTI Crude - No Sign of a Reversal

Author: rhboskres   |  Publish date: Thu, 9 Jul 2020, 6:28 PM


Maintain long positions. The WTI Crude continued to show signs of lacking momentum and trading in a relatively narrow range, indicating that the market is likely waiting for fresh catalysts. The latest session saw the black gold reaching a low and high of USD40.30 and USD41.08, before closing USD0.28 higher at USD40.90. While there was a lack of momentum, there were no signals of price reversals. Hence, we are keeping our positive trading bias for now.

We maintain our recommendation for traders to stay in long positions. We initiated these at the USD39.82 threshold, which was the closing level of 1 Jul. To manage risks, a stop-loss can now be placed at the breakeven mark.

Immediate support is maintained at USD39.00, near 1 Jul’s low. This is followed by USD37.00, which is close to the low of 18 Jun. Moving up, the immediate resistance is eyed at USD41.63 – the high of 23 Jun – and followed by USD43.32, or the low of 2 Mar.

Source: RHB Securities Research - 9 Jul 2020

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