Written by CIMB Equities Research
Monday, 05 April 2010 08:54
KUALA LUMPUR: CIMB Equities Research has a Buy on Scomi Group at 40 sen as it sees the correction is at its tail end.
"Scomi is still gyrating in a descending wedge pattern. Although prices have been making lower lows formation over the past few months, it seems that the correction is probably at its tail end.
"A breakout above its 50-day SMA (at RM0.415) would likely indicate that a stronger rebound is underway," it said on Monday, April 5.
CIMB Research said despite the share price weaknesses, it sees a bullish divergence in its MACD indicators. This suggests that selling pressure is tapering off. Also, its RSI has started to hook upward.
Traders with greater risk appetite may get in now in anticipation of a breakout run. Once the 50-day SMA is overcome, next upside targets are 43 sen and 46 sen. However, keep stop tight at 38 sen.
Scomi Group sells drilling mud and chemical products, provides drilling fluids materials, equipment, and services, manufactures and fabricates road transport equipment and material handling equipment, operates marketing agent for road transport equipment, and provides leasing on motor vehicles.