Thursday, May 5, 2011

CIMB Research has Buy on DRB-Hicom at RM2.17

KUALA LUMPUR: CIMB Equities Research has a Buy on DRB-HICOM BHD [] at RM2.17, at which it is trading at a price-to-book value of 0.9 times.

It said on Thursday, May 5 the pullback for DRB-Hicom appears to be at its tail end.

'Prices have pulled back to RM2.15, its 50%Fibonacci Retracement level as well as to test its 50-day SMA at RM2.14. We expect prices to find strong support around these levels,' it said.

CIMB Research said the stock's MACD has pulled back to its zero line while its RSI is still holding above the 40-pts mark.

'This pullback should be viewed as an opportunity to buy as the uptrend from the March 2011 lows is not over. The next upleg should take prices to a new high of RM2.55 or RM2.80. A drop below RM2.10 would trigger our stop,' it said.

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