Friday, February 18, 2011

KPJ Trading Ideas - A Breakout Above The DTL (Down Trend Line) Will Spur Prices Higher To RM4.00

Stock to watch now is the KPJ Group. It may poise to stage a breakout above the DTL (Down -Trend-Line).

KPJ is a leading private health care provider in the country with a network of 21 hospitals in Malaysia and 2 in Indonesia.

Given its leading position and expansion plans in Malaysia’s growing health care market, KPJ’s stock valuation discount to regional peers has narrowed since 2010 amid growing interest in defensive sector. At RM3.76, it is trading at 12.4x FY12
Bloomberg consensus P/E (regional: 17-18x).

KPJ’s share price corrected from 52-week high of RM4.00 on 6 Jan 11 to as low as RM3.69 (21 Jan & 14 Feb) before closing at RM3.76 yesterday.

The stock is poised to violate its short term downtrend line soon, and with the gradual uptick in trend and momentum indicators, KPJ is likely to retest RM3.86 (23.6% FR) and RM3.90 (27 Jan intraday high) levels. Tougher resistance levels are RM4.00 and RM4.20. Immediate support levels are RM3.69, RM3.66 (61.8% FR) and RM3.63 (150-d SMA).

KPJ 18-02-2011

Source: HLeBroking

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