After rising from RM0.12 on 19 March to hit a high of RM0.54 on 1 June, LYC’s share price subsequently pulled back by as much as 52% to a low of RM0.26 recently before closing at RM0.33 yesterday.
On the chart, its RSI indicator – which has been sliding towards the oversold territory in tandem with the share price weakness – saw a tick-up recently, possibly indicating that a short-term trend reversal may be underway.
A likely rebound could push the stock to reach our resistance target of RM0.39 (R1), before challenging the next resistance level of RM0.44 (R2) thereafter. This represents potential returns of 18% and 33%, respectively.
Our stop loss threshold is pegged at RM0.28 (or 15% downside risk).
Meanwhile, pursuant to an ongoing private placement exercise involving the issuance of up to 30% of its share base (representing 107.2m shares), LYC’s major shareholder Lim Yin Chow (who currently holds a 18.3% stake) has stated his intention to take up any unsubscribed portion of up to 50.0m shares. This could be a seen as a vote of confidence in the Group’s fundamentals from its substantial shareholder.
NTPM Holdings Bhd (Trading Buy)
After the March market meltdown, NTPM’s share price has since recovered from a trough of RM0.295 to peak at RM0.615. It saw a subsequent correction and settled at RM0.495 yesterday.
On the chart, the stock is looking to find support around the current price levels. This could then pave the way for its shares to resume its uptrend soon.
Riding on the positive momentum, its share price will probably climb to our resistance target of RM0.57 (+15% potential upside), before testing the next resistance line of RM0.615 (+24% potential upside).
On the downside, the stop loss level is set at RM0.43 (-13% downside risk).
Fundamentally, NTPM stood out in the current result reporting season with a better earnings performance (unlike the majority of listed companies which were hit by the Covid-19 restrictions). It posted net profit of RM4.1m in the Feb-Apr quarter (versus net loss of RM4.9m in the previous year) on the back revenue of RM201.6m (+11% YoY) as the Group (which is involved in the business of tissue paper and personal care products) remains largely unaffected by the Covid-19 pandemic.
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