Technical Stock Pick - Eastern & Oriental Berhad 23 April 2012

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Technical Stock Pick - Eastern & Oriental Berhad 23 April 2012

Post by Cals on Mon 23 Apr 2012, 17:28

Technical Stock Pick - Eastern & Oriental Berhad 23 April 2012

Ready to rebound after hitting support

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Recommendation: Trading Buy
Closed: RM 1.43
Resistance: (R1) 1.60 / (R2) 1.85
Support: (S1) 1.36 / (S2) 1.26


Eastern and Oriental Bhd (E&O) has declined 42 sen or 23.2% from a 4-year high of RM1.85 in February. The downtrend broke its 9 to 200-day moving averages and has now landed at its long term uptrend channel.

On technical indicators, RSI has declined and is just above the oversold zone. Similarly, MACD reading has dropped until -0.03 and remains below its signal line.
If the uptrend since March 2009 remains intact, the stock could stage a rebound. Friday’s doji candlestick has hinted a trend reversal.

We recommend a trading buy call on this stock and expect the price to hit RM1.85. For more confirmation, traders can wait until share price breach its moving averages at RM1.50. However, we advise traders to cut loss if the price falls below RM1.36. The stop loss at RM1.36 coincides with Fibonacci retracement of 23.6% (monthly chart).

Lee Cherng Wee

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