Wednesday, September 14, 2011

CIMB Research has technical sell on DiGi

KUALA LUMPUR: CIMB Equities Research has a technical sell on DIGI.COM BHD [] at RM31.12 at which it is trading at a FY12 price-to-earnings of 17.9 times and price-to-book value of 19.4 times.

It said on Wednesday, Sept 14 the stock is among the stocks that have held up steadily despite the recent market volatiitly.

'However, we are starting to see some weakness creeping in. The recent candles following the gap up do not signal that there is more bullishness ahead. The long spike to RM33.58 but the buying power could not be sustained, which signals a possible reversal,' it added.

CIMB Research said coupled with the triple bearish divergence on both its indicators, it believed that the downside risk is much higher than the upside potential.

It added that locking in profits now would be a good idea in its opinion. A break below RM29.90, its 50-day SMA would likely add weight to its bearish call, targeting the 200-day SMA at RM27.76 and lower.

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