AA Legacy Traders

Market update: The FBM KLCI climbed above the psychological 1,500 level amid positive regional market sentiment as investors cheered that the inflation is cooling off in the US for June. Whilst the market has stabilised along 1,500, we believe the profit taking activities may pick up with the mixed trading tone on Wall Street overnight, following a drop in PPI data. Hence, broader market may take a breather for the short term; especially the technology sector. Commodities wise, the Brent oil is trading higher towards the USD100 mark, while the CPO price headed above RM4,290.

Sector focus: The energy sector may see some positive move along with the higher Brent crude oil prices. Meanwhile, the technology sector might see mild profit-taking following yesterday’s strong surge. Ahead of the earnings season, traders may position within the consumer, banking, furniture and plantation sectors.

Stocks to watch:

Tech & Telco: CTOS, D&O, FRONTKN, GREATEC, GTRONIC, PENTA, THETA, UWC, YBS
Oil & Gas: DAYANG, DIALOG
Furniture: EVERGRN, SIGN
Finance: AFFIN, CIMB
Plantation: BPLANT, TSH
Power-related: TENAGA, YTLPOWR
Construction & Building material: AJIYA, ANNJOO, HSSEB, PMETAL
Others: ECOWLD, KYM

Source: M+ Online

M+ Online Technical Focus - 6Jul22
Duopharma Biotech Bhd: Expansion within ASEAN market

Trading Catalyst
• Owns and operates 3 manufacturing plants in Klang, Bangi and Glenmarie, Selangor with a portfolio of more than 300 generic drugs.
• Aims to strengthen their presence in the overseas market, through potential merger & acquisition activities within the ASEAN market.
• Working towards the extension of approved product purchase list (APPL) contract for the next 12 months, upon expiry at end-2022.
• Technically, traders may anticipate for a potential flag-formation breakout above RM1.20, targeting the next resistances at RM1.28-1.35 with long term target at RM1.48.

Technical View

(i) DPHARMA (S: RM1.12, R: RM1.28-1.35, LT TP: RM1.48, CL: RM1.11)

S: Support, R: Resistance, LT TP: Long term target price, CL: Cut loss

Source: Bloomberg, M+ Online

Market update: The FBM KLCI outperformed the regional peers as investors picked up beaten-down shares, led by the banking and telecommunication & media heavyweights. While late-day rebound lifted Wall Street, we expect volatility to persist on the local bourse as inflationary pressure and recession fears still dominating the market. Investors are likely to stay cautious prior to the Malaysia’s interest rate decision and the US FOMC meeting (later this month). Meanwhile, the Brent oil price rose, trading above USD111 per barrel due to supply outages in Libya and expected shutdowns in Norway.

Sector focus: We remain optimistic on the recovery-themed stocks in the 2H22 such as banking, consumer and tourism. Besides, the energy sector may gain traction on the back of persistent tight supply in the market. Also, investors may scoop up the technology shares tracking rebound in Nasdaq.

Stocks to watch:

Consumer & Furniture: ECOMATE, MRDIY, TAFI
Construction: GAMUDA, HIAPTEK, MESTRON, MYCRON
Chemicals: HEXIND, HEXTAR
Finance-related: CIMB, PPJACK
Utilities: MALAKOF, TALIWRK, YTLPOWR
Technology & Telco: CORAZA, DSONIC, TM, UWC, VIS
Others: EPMB, KFIMA, MEDIA

Source: M+ Online

3Q22 Market Chat: A messy fight between the bulls and bears

• Heightened volatility was experienced due to (i) rising inflationary pressure, (ii) tension between Ukraine-Russia, (iii) hawkish Fed’s tone and (iv) recession fears.
• Given Malaysia has transitioned into endemic phase, it might benefit consumer & services sector with the reopening of business activities and upliftment of borders. We expect firm demand for the transportation & logistic sector moving forward.
• We like energy sector with the elevated Brent oil price, while the tech sector could see upward potential after a near-to-40% drop in the sub-index from the peak.
• We favour the banking industry under the interest rate upcycle environment.

3Q22 Stock picks:-

1. UWC (S: RM2.90-3.23, R: RM3.89-4.18, CL: RM2.85)
2. DUFU (S: RM2.62-2.75, R: RM3.10-3.28, CL: RM2.60)
3. DAYANG (S: RM0.90-0.94, R: RM1.10-1.14, CL: RM0.88)
4. GASMSIA (S: RM2.87-2.97, R: RM3.22-3.30, CL: RM2.85)
5. PTRANS (S: RM0.70-0.725, R: RM0.86-0.905, CL: RM0.68)
6. SYSCORP (S: RM0.355-0.375, R: RM0.445-0.47, CL: RM0.34)
7. PWROOT (S: RM1.57-1.63, R: RM1.83-1.92, CL: RM1.55)
8. GCB (S: RM2.40-2.46, R: RM2.71-2.80, CL: RM2.38)
9. QL (S: RM5.08-5.23, R: RM5.71-5.92, CL: RM5.05)
10. AMBANK (S: RM3.47-3.62, R: RM3.98-4.11, CL: RM3.45)

S: Support, R: Resistance, CL: Cut loss

Source: Bloomberg, M+ Online

M+ Online Market Wrap - 27Jun22

FBM KLCI: 1,438.12 pts (+1.42pts, +0.10%)
The FBM KLCI (+0.10%) eked out small gains after enduring a volatile morning session as the advance on Wall Street set a positive pace for Asian stocks. Market breadth remained positive as the advancers hammered the decliners by 546-to-365 stocks. The technology sector (+2.83%) showed signs of further strength following the sharp gains in Nasdaq overnight, led by MYEG(+4.0 sen), INARI(+7.0 sen), and VITROX(+27.0 sen). Meanwhile, the energy sector (+1.65%) rebounded along with higher crude oil prices.

Top 3 Active stocks:
GPACKET (0082): RM0.065 (unch)
REACH (5256): RM0.08 (-0.5 sen)
DNEX (4456): RM0.795 (+3.0 sen)

Volume: 2.66 bn (100-day avg vol: 3.00 bn)
Value: 1.44 bn (100-day avg val: RM2.41 bn)
Market Breadth: ⬆546 ⬇365
Crude palm oil: RM4,664 (+RM275)
Dow Futures: 31,611 pts (+124 pts)

Source: Bloomberg, M+ Online

M+ Online Technical Trading Stocks - 24Jun22

Stock Name: PADINI (7052)
Entry: Buy above RM3.27
Target: RM3.50 (7.0%), RM3.65 (11.6%)
Stop: RM3.05 (-6.7%)
Shariah: Yes
Technical: Monitor for breakout

Stock Name: EPMB (7773)
Entry: Buy above RM0.98
Target: RM1.05 (7.1%), RM1.11 (13.3%)
Stop: RM0.92 (-6.1%)
Shariah: Yes
Technical: Monitor for breakout

Source: Bloomberg, M+ Online