Bursa Malaysia Stock Watch

Broker's Call - Friday, 29 January 2010

kltrader
Publish date: Sat, 30 Jan 2010, 07:15 PM
kltrader
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* Land & General (RM0.515, SELL) ? Unload on strength.
* Supportive International (RM1.31, SELL) ? Gains are likely capped.
* Malaysian Resources Corp (RM1.48, BUY) ? Potential breakout from trend line.
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Land & General (RM0.515) ? SELL
FY10P/E: N/A, P/BV: 1.4x

? The stock took a sharp correction shortly after hitting its 52-week high of RM0.64. The pullback almost reached the 50% Fibonacci Retracement (FR) level (measuring from the RM0.31 low), and we think there is a possibility that a mild rebound may kick in soon.
? Yet, its upside could be meagre as gains are likely capped at RM0.525-RM0.535 in the near term. Hence, the best strategy here is still to unload on strength. Unless the rebound inch above the RM0.565 level, the bears seem to have a slight advantage.
? Indicators remain fragile. MACD is still skidding while its RSI has also retraced from its peak. Immediate support is around RM0.485-RM0.475 (coincidently also close to its 30-day SMA). Further correction would drag the stock towards RM0.44 and RM0.425 next.

Land & General is an investment holding company. The company, through its subsidiaries, manages and develops properties and provides education services.
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Supportive International (RM1.31) ? SELL
FY10P/E: 25.7x, P/BV: 4.0x

? The stock broke below its support trend line in mid-Jan. Since then, it has been gyrating sideways, barely holding above its 30-day SMA. As its 30-and 50-day SMAs are about to converge, we doubt prices could swing up strongly in the near term.
? Indicators are already showing signs of weariness. MACD signal line continues to fall while its RSI has also flattened out.
? If prices fall below the 50-day SMA at RM1.25, it could also mean more downside ahead. Further pullback should drag the stock towards RM1.18 and RM1.12 next. Resistance is at RM1.38-RM1.40.

Supportive International Holdings manufactures and sells cable accessories and connectors, AC sockets, optical digital cables, security intercom, and elevator interphones.
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Malaysian Resources Corp (RM1.48) ? BUY

FY10P/E: 28.5x, P/BV: 2.1x

? The bullish engulfing pattern formed yesterday could indicate that a rebound is taking place now. Recent correction dragged prices to its 61.8% FR and buying interest is picking up again. Another white candle today should lift MRCB closer towards its next resistance at RM1.55 and RM1.62.
? MACD histograms are falling at a slower pace while its RSI has also hooked upward again. A breakout above the stipulated resistance levels may also push the stock to re-test its January?s high of RM1.72.
? Risk takers may take position now and ride the potential breakout run. Always keeps stop tight at RM1.44-RM1.42 in case this is just a dead cat bounce.

Malaysian Resources Corporation is an investment holding company. Through its subsidiaries, the company provides construction and engineering services, multimedia, property development and management, information technology services, and independent power producer.
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