Friday, July 8, 2011

CIMB Research has Buy on Kossan at RM3.17

KUALA LUMPUR: CIMB Equities Research has a technical Buy on KOSSAN RUBBER INDUSTRIES BHD [] at RM3.17 at which it is trading at a FY12 price-to-earnings of 7.5 times and price-to-book value of 2.2 times.

It said on Friday, July 8 Kossan is consolidating in a bullish flag pattern. Recent rebound lift prices above the resistance channel as well as its 30-day and 50-day SMAs.

There is a good chance that the candles may swing past the flag resistance.

CIMB Research said once the RM3.24 level is taken out, it expect follow through momentum to pick up. This should further lift prices towards RM3.40 and RM3.58 next.

'Our short term bullish stance is also backed by the improving technical landscape. MACD has returned to the black while RSI is also rising.

'Risk takers may take some position here before the breakout materialises. Others should join the bandwagon when RM3.24 is taken out. Place a stop at below RM3.06-2.98 in case this is a bull trap,' it said.

No comments:

Post a Comment