Quite the contrary, MFLOUR recent 4th quarter earnings slid by 35.6% YoY from RM20.5m in 4Q11 to RM13.2m in 4Q12. However, all is not lost for the stock, and from a technical perspective, the share price looks to have priced in the negatives. For the first time in two years, MFLOUR's share price has penetrated all three SMAs (20-, 50- and 100-day SMA) after yesterday's 5 sen advance to RM1.27. In fact, the 20- and 50-day SMAs have just completed a "Golden Crossover", and we reckon that this could be a prelude to a bullish trend reversal. The MACD is also showing signs of "Bullish Divergence", and momentum is gradually shifting to the upside. At this point, downside risks appear limited, where a bottom seems to have formed at RM1.14. Meanwhile, the next major resistance is a fair distance away at RM1.44.
Source: Kenanga