Bursa Malaysia Stock Watch

Broker's Call - Fri, 22 January 2010

kltrader
Publish date: Fri, 22 Jan 2010, 06:28 PM
kltrader
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* Leader Universal Holdings (LUH MK; RM0.90, SELL) ? Bulls need to be cautious.
* Kumpulan Fima (FIMA MK; RM0.855, SELL) ? Gains are likely capped.
* Frontken Corporation (FRCB MK; RM0.275, SELL) ? Recent rally may have hit a snag.
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Leader Universal Holdings (RM0.90) ? SELL
FY10P/E: 6.2x, P/BV: 0.7x

? Despite the gap-up on 13th Jan, Leader failed to capitalise on this upward swing. Instead, the stock gyrated sideways and consolidated sideways. The formation of few black candlesticks in a row shows that buyers are turning more cautious now and this would likely capped near-term gains.
? Technical indicators also show some signs of exhaustion. MACD histogram bars are losing momentum while its RSI retraced a tad lower from its peak. These would likely undermine any recovery effort.
? Traders should do well selling into strength, preferably near the RM0.965 resistance. Broker expects prices to fill the RM0.87-RM0.85 gap while further breakdown would push the stock lower towards RM0.745 next.

Leader Universal Holdings is an investment holding company. The company, through its subsidiaries, manufactures and sells telecommunication and power cables, aluminum rods, copper rods, and optical fiber cables. Leader Universal also develops property and manufactures switchboard cables, coaxial cables, and various electronic wires.
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Kumpulan Fima (RM0.855) ? SELL
FY10P/E: N/A, P/BV: 0.6x

? Kumpulan Fima violated the triangle support in mid-Dec. Thereafter, the stock has been tracking the underneath of this trend line. Although it could still gain grounds in the near-term, we are not overly excited as gains would likely be capped at RM0.90-RM0.91.
? MACD is testing the resistance trend line. If it fails to breakout, then a deeper pullback is likely underway. Meanwhile, its RSI is also dwindling towards the neutral zone.
? Broker prefers to stick with the bears? camp for now. If prices fall below the key SMAs and subsequently the December?s low of RM0.79, then the uptrend from March would have ended. Next support is at RM0.75 and RM0.70.

Kumpulan Fima is an investment holding company. Through its subsidiaries, the company operates pineapple estate, processes and cans pineapple, and cultivates tropical fruits. Kumpulan Fima also has operation in cattle farming, provides transportation services, and trades securities and confidential documents.
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Frontken Corporation (RM0.275) ? SELL
FY10P/E: 4.7x, P/BV: 1.5x

? Frontken?s recent rally hit a snag after prices rallied to a high of RM0.29. Consolidation is likely to set in and the RM0.26 immediate support is likely to be tested soon. A deeper correction will take place if this level is infringed, with next support seen at RM0.235 and RM0.215.
? MACD is losing a bit of steam here. Its signal line is flattening while the RSI has also dwindled a tad lower. These negative signs indicate that near-term gains are capped.
? Broker believes traders should take profit now, if not higher towards the RM0.29-0.30 resistances. This mini-bull appears weak and is likely near its tail-end, at least for now.

Frontken Corporation provides surface metamorphosis technology with thermal spray coating processes.

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