Thursday, October 20, 2011

CIMB Research has technical buy on Muhibbah

KUALA LUMPUR: CIMB Equities Research has a technical buy on Muhibbah Engineering at RM1.21 at which it is trading at a FY12 price-to-earnings of 6.1 times and price-to-book value of 1.0 times.

It said on Thursday, Oct 20 Muhibbah Engineering broke out of its medium term downtrend channel recently. The rebound also lifted prices above its 30-day and 50-day SMAs.

'Looking at the chart, we think there is still room to the upside. Prices are likely to charge towards RM1.28 and RM1.36 in the near term. If these levels are taken out, the 200-day SMA (at RM1.45) will be the next target,' it said.

CIMB Research said the MACD signal line has returned to the black while RSI is also above the 50pts mark. The positive technical reading reflects its stance on the stock.

'Traders with higher risk appetite may start to nibble now. However, always put a stop at below RM1.11, just in case,' it said.

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