Friday, July 23, 2010

CIMB Research: Upside for Pos Malaysia capped at RM3.36

KUALA LUMPUR: CIMB Equities Research said the upside for Pos Malaysia's share price is capped at RM3.66 and that traders may want to take profit.

In its technical outlook for Pos issued on Friday, July 23, it said even if prices push past this high, sustainability remains a key concern here. Pos is trading at FY11 price-to-earnings of 10.1 times and price-to-book value of 2.1 times.

'Pos Malaysia appears to be forming a double top pattern. If prices fall below its 30-day SMA (now at RM2.98), it would likely signal that the uptrend from May has ended,' it said.

CIMB Research said if the share price falls further below its 50-day SMA at RM2.87, this would likely confirm that prices are heading lower to test its 200-day SMA at RM2.47, which is also its neckline support.

It said the bearish divergence in MACD suggests that momentum has waned while RSI has also hooked downward.

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