In January, we advised traders to accumulate DRB-Hicom'sshares after a strong intra-day rally, which more or less confirmed that a newfloor had been constructed at the RM1.98 level. Subsequently, its share pricehas also appreciated aggressively and eventually reached our RM2.50 pricetarget. Meanwhile, it seems that the price retracement of late has foundsupport at the RM2.48 level and the Monday's violation of the short-termdowntrend line has triggered a Buy signal. Hence, we advise traders toaccumulate shares  of DRB-Hicom  now. The upside target is pegged at theRM2.93 level but traders should cut loss should the critical RM2.48 supportfloor be taken out. As mentioned above, we had  previously advised traders toaccumulate DRB-Hicom's shares after the stock recorded a strong rally on15  Jan 2012, which more or lessconfirmed that a new floor had already been constructed at the RM1.98 level.Figure 2 illustrates the technical landscape at that time.

 DRB-Hicom has been inretracement mode after reaching the RM3.26 peak in early February, but it seemsto have found support at the RM2.48 level, as evidenced by the rebounds seen inthe 1-5 March period and two days ago. As the rebound, which  emerged from the RM2.48  level two days ago, has also violated the short-term downtrend line, a newtrading opportunity has arisen.

We advise traders to accumulate DRB-Hicom's shares after thebreakout. The recent major peak of RM2.93 is our upside target but prior tothis level, resistance can be seen at the RM2.84 level. Traders should considercutting  loss if the share price violatesthe critical RM2.48 support floor.

In the event that the critical RM2.48 support level isviolated, a major breakdown will be triggered and its share price is expectedto retrace to the RM2.40 level or even to the strong support area ofRM2.30-RM2.33.

Source: OSK188