Monday, October 3, 2011

CIMB Research has technical sell on Hong Leong Bank

KUALA LUMPUR: CIMB Equities Research has a technical sell on HONG LEONG BANK BHD [] at RM10.18 at which it is trading at a FY12 price-to-earnings of 10.4 times and price-to-book value of 2.1 times.

It said on Monday, Oct 3 that after featuring Hong Leong Bank as a technical sell stock on Sept 23, prices fell to a low of RM9.45 before bouncing back a tad higher to current levels.

'Neverthless, we think that these are likely dead cat bounces, where sustainability is a key concern,' it said.

CIMB Research said although MACD signal line has bounced off lows, it added the bears at its 200-day SMA need to be respected. Hence, any rebound is an opportunity to take profit.

'If prices indeed fail to push above the 200-day SMA, we expect next downleg to drag prices towards RM9.45 and RM8.80. We will only review our call if the candles swing above the RM10.60 level,' it said.

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