M+ Online Morning Market Buzz - 24 Aug 22

Dow Jones: 32,909.59 pts (-154.02pts, -0.47%)
⬆️ Resistance:  34900
⬇️ Support:  32300

FBM KLCI: 1,482.57 pts (-4.80pts, -0.32%)
⬆️ Resistance:  1560
⬇️ Support:  1450

HSI Index: 19,503.25 pts (-153.73pts, -0.78%)
⬆️ Resistance:  20500
⬇️ Support:  19000

Crude Palm Oil: RM4,291 (+RM57, +1.35%)
⬆️ Resistance:  4370
⬇️ Support:  3920

Brent Oil: $100.22 (+$3.74, +3.88%)
⬆️ Resistance:  102.50
⬇️ Support:  89.70

Gold: $1,748.15 (+$11.85, +0.68%)
⬆️ Resistance:  1820
⬇️ Support:  1700

M+ Online Technical Focus - 24 Aug 22
Wellcall Holdings Bhd: Propelled by solid demand in industrial rubber hose

Trading Catalyst
• The largest original equipment manufacturer (OEM) rubber hose manufacturer in Malaysia with approximately 90.0% of their products are exported overseas.
• Focus on the high-mix, low-volume (HMLV) products and will gradually revise their pricing for certain products in line with the higher cost of production.
• Equipped with a net cash position of RM59.5m, translating to net cash per share of 12.0 sen (c.9.6% of share price) and adopts a dividend policy of minimum 50.0% pay-out from net profit.
• Technically, price has formed a short-term resistance breakout above RM1.24, targeting the next resistances at RM1.29-1.38 with long term target set at RM1.50.

Technical View

(i) WELLCAL (S: RM1.18, R: RM1.29-1.38, LT TP: RM1.50, CL: RM1.17)

S: Support, R: Resistance, LT TP: Long term target price, CL: Cut loss

Market update: The FBM KLCI extended its downtrend move along with most of the regional bourses as concerns persisted ahead of the Jackson Hole meeting; investors may react negatively if the Fed turned more hawkish going forward. Following another lacklustre session on Wall Street, we believe the local sentiment is likely to remain shaky. However, bargain-hunting may emerge on the broader market especially companies with solid earnings growth. Commodities wise, the crude oil saw a rebound above USD100 after OPEC warned a potential output reduction to correct the recent price drop. Meanwhile, the CPO price hovered above RM4,200. 

Sector focus: We believe the energy sector should continue to trend higher following the surge in crude oil price above USD100 per barrel mark. Meanwhile, the plantation sector may see some buying interest as the CPO price is showing signs of rebounding. We remained our positive stance in consumer, REIT, and banking sectors.

Stocks to watch: 

O&G: DAYANG, HIBISCS, PANTECH, YINSON
Consumer: KAWAN, PADINI, SDS
Packaging -related: MASTER, PPHB
Technology-related: CNERGEN, CORAZA, INFOTEC, LGMS, SFPTECH
Others: AXIATA, JAKS, PEKAT

Source: M+ Online

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