Recall that on the 18th Dec 2013, we recommended a technical buy on ULICORP. While some positive developments have since arisen (namely the signing of a distributorship agreement with OPPLE lighting – the no. 1 consumer lighting brand in China), investors' response to the news was tepid at best. From a technical perspective, the MACD indicator is starting to show signs of bearish divergence, while the Stochastic and RSI indicators have both dipped downwards into the bearish territory. In fact, the share price has broken below the 20-day SMA which shows that the technical picture is deteriorating. As such, our prior bullish view is nullified, and we now suggest that traders trim the marginal losses (-2 sen) and look for other technical picks.

 

Source: Kenanga