Sunday, August 14, 2011

AirAsia: Medium Term Uptrend Remains Intact

Stock to watch – AIRASIA (TRADING BUY)

In the wake of the share swap deal announcement (AIRASIAMAS-KHAZANAH), AIRASIA was suspended on 8 & 9 August. Upon the re-quotation on 10 August, AirAsia tumbled from 52-wk high of RM4.20 on 4 August to as low as RM3.32 on 11 August, as share prices catch-up with the huge selldown on the global markets.

Investors are also concerned that Tune Air’s stake in AirAsia been substantially reduced from 23% to 13% and that MAS will drain too much of Tony’s time and energy. To dispel the worries, Tony clarified that he will be purely directors who will “give ideas and share thoughts” and MAS will be run by an appointed CEO and his management team.

Following the breakdown of its mid-Bollinger band (RM3.75), 10-d (RM3.86) and 30-d (RM3.67) SMAs supports, AIRASIA near term technical outlook has turned negative. Nevertheless, we are relieved that the long term uptrend line (RM3.15) and lower
Bollinger band (RM3.30) supports remain intact, and coupled with oversold indicators and an uptick in Money Flow Index, a technical rebound is in the pipeline this week. Immediate resistance levels are RM3.67 and RM3.86. Supports are RM3.30 and RM3.15. Cut loss below RM3.15.

Daily AirAsia: Medium Term Uptrend Remains Intact Despite Near Term Consolidation

Source: HLIB Research

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