COASTAL share price retreated from its recent high of RM4.81, after a private placement proposal on 26th Feb. While this will cause EPS dilution, our Oil & Gas analyst still has an OUTPERFORM recommendation, believing that new earnings (from jack-up rig and jack-up rig compression unit) will absorb the dilution. Yesterday, COASTAL finally rebounded from its uptrend channel support of RM4.13, gaining 13 sen to close at RM4.33. Technically speaking, COASTAL has formed a long bullish candlestick on the daily chart, indicating that buying interests were strong throughout the day. Hence, we expect the share to extend its gains over the short-term to retest its previous high of RM4.81. Should this level be taken out, further gains would be expected towards RM5.00 (R2).
Source: Kenanga