CIMB Research has Sell on KL Kepong

KUALA LUMPUR: CIMB Equities Research has a Sell on Kuala Lumpur Kepong at RM21.02 at which it is trading at a FY 2012 price-to-earnings of 16.8 times and price-to-book value of 3.5 times.

It said on Thursday, Aug 11 the share price, after violating the triangle support, slipped below its 30-day and 50-day SMAs. Although the bulls tried to fight back, selling pressure proved a tad too strong. Recently, the candles also fell below its 200-day SMA, which is another bearish sign.

“In the near term, gains are likely capped at RM21.30-RM21.92. Therefore, traders should do well selling into strength, preferably near the stipulated resistances. Only a rise above RM22.00 would prompt us to review our call,” it said.

CIMB Research said the MACD is hovering in the negative territory while RSI is below the 50 points mark. Support is at RM20.00 and RM19.20.