KUALA LUMPUR (Feb 22): CIMB Equities Research has a technical sell on Petronas Dagangan at RM18.10 at which it is trading at a FY13 price-to-earnings of 15.1 times and price-to-book value of 3.9 times.
It said on Wednesday the stock’s rally is still intact but we are beginning to see signs of exhaustion. The recent pullback has been steep, although it has yet to break the moving averages or the key support trendline at RM17.20.
“Nevertheless, the indicators are showing that the upward momentum is slowing down. The MACD has just confirmed its dead cross, which in turn, confirmed its bearish divergence signal. Its weekly charts also sport bearish divergence signals,” it said.
CIMB Research said bulls should start to take notice and tighten stops. Prices could potentially climb a tad further towards RM19.20-RM20.00 but the downside risk is much greater.
“A break below RM17.20 would confirm that the stock is undergoing a correction towards RM14.50,” it said.
It said on Wednesday the stock’s rally is still intact but we are beginning to see signs of exhaustion. The recent pullback has been steep, although it has yet to break the moving averages or the key support trendline at RM17.20.
“Nevertheless, the indicators are showing that the upward momentum is slowing down. The MACD has just confirmed its dead cross, which in turn, confirmed its bearish divergence signal. Its weekly charts also sport bearish divergence signals,” it said.
CIMB Research said bulls should start to take notice and tighten stops. Prices could potentially climb a tad further towards RM19.20-RM20.00 but the downside risk is much greater.
“A break below RM17.20 would confirm that the stock is undergoing a correction towards RM14.50,” it said.
