• Profile: Excel Force MSC Berhad (EFORCE) is a Malaysia-based company engaged in the development, provision and maintenance of computer software application solutions for the financial services industry. The Company operates in three divisions: application solutions division, maintenance services division and application services provider division. Its subsidiary, Insage (MSC) Sdn. Bhd, is involved in the provision of software solutions. Operations are carried out in Malaysia, Vietnam and Thailand.
• Losing momentum: At RM0.85, EFORCE is trading at 4.1x P/B (FIG4), about 63% higher than peers’ 2.5x. Share price seems to be losing its upside momentum after breaching its previous high of RM0.955 in July 2014 (FIG2) to reach a historical high of RM0.99 (a tad above our neckline breakout objective price of RM0.98) on 30 Dec before ending at RM0.85 on 31 Dec.
• On oscillators-wise, reading from daily and weekly MACD, RSI and Slow Stochastic showed that the stock is grossly overbought. In addition, its daily MACD had formed a bearish crossover with histogram turning into the negative zone, fueling its near-term selling pressure. Thus, we deem the stock as a momentum sell with immediate supports near RM0.81 (61.8% FR), RM0.795 (31 Dec low) and RM0.765 (76.4% FR).
• However, any rebound will see upside near RM0.88 (38.2% FR and 10-d SMA), RM0.92 (23.6% FR) and RM0.99.

Source: Hong Leong Investment Bank Research - 4 Jan 2016