Wednesday, May 18, 2011

CIMB Research has Buy on MRCB at RM2.20

KUALA LUMPUR: CIMB Equities Research has a technical Buy call on MALAYSIAN RESOURCES CORP [] Bhd at RM2.20 at which it is trading at FY12 price-to-earnings of 30.6 times and price-to-book value of 2.4 times.

It said on Wednesday, May 18 that MRCB appears to be trapped in a sideways consolidation triangle, similar to the one forming on the FBMKLCI. The triangle could potentially be on its final leg lower to complete this pattern.

'If we are right, the stock is poised for strong rally once this pattern ends. Prices could pull back towards RM2.12-2.17 and traders would likely do well getting in long at those levels. Cut losses if prices fall below RM2.09.

'Technical landscape is flat, supporting the sideways triangle view. A breakout above RM2.30 would mean that prices are heading towards RM2.41 and RM2.47 next, where the latter is its 78.6%FR of its 2007-2008 drop,' it said.

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