Techically buy Meiban and Broadway

Meiban - Technical Trading Buy, TP: $0.34

The most exciting technical development that catches our eye is the nicely placed converging 15-day, 65-day and 200-day exponential moving averages (EMA). This is a tell-tale sign of a sustainable rising trend ahead and hints of a cyclical upturn for Meiban. In addition, the stock is currently trading just slightly above the 3 converging EMAs, suggesting that price has yet to ‘run away’.

We like the ‘buy signals’ from the daily MACD as well - the indicator has turned above zero and cut its 9-day EMA trigger line to the upside.

Support is at $0.245. We see the stock moving in the uptrend channel shown with a price objective of $0.34. Risk reward is very attractive. The upside potential of 8.5cts far outweighs the downside risk of only 1ct. Recommend trading buy.


Broadway - Technical Trading Buy, TP: $0.47

The 15-day, 65-day and 200-day EMAs have converged and the stock managed to stay above its 200-day EMA for the past 2 sessions. As the daily MACD signaled a ‘buy’ because it has turned above its 9-day EMA trigger line and remained above the zero level, the stock price should continue to maintain above its 200-day EMA. A sustainable rising trend is suggested on the back of a cyclical upturn.

We observed that resistance has been low, which is a positive sign – The stock’s most recent rise from $0.30 to $0.36 during the past 10 trading days occurred on an average daily traded volume of 0.5mil shares. This is much lower than the average daily traded volume of 1.1mil shares during the period from mid-May to mid-June when the stock had a similar price range. This suggested that little effort was needed for the stock to head towards its June closing high of $0.375.

Support is at $0.345. We see the stock moving in the uptrend channel shown with a price objective of $0.47. Risk reward is very attractive. The upside potential of 11cts far outweighs the downside risk of only 1.5ct. Recommend trading buy.

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Technically sell OCBC, Venture; Buy Meiban

Technically…

Oversea-Chinese Banking Corp (OCBC SP; S$4.89 – SELL): Breaking below the S$4.80 support level is bearing over the immediate term.

• If it breaks below the S$4.80 support level, sentiment may turn bearish over the immediate term. Next support is much weaker at S$4.65, S$4.41 and S$3.90.

• Technical indicators are showing signs of exhaustion. MACD has confirmed its dead cross and stayed negative while RSI is still flat.

• Sell now ahead of the breakdown. Resistance is seen at S$5.15 and S$5.48 levels. Unless it can cut above these resistances to reverse the short-term bearish trend, any intermittent rebound may not be sustainable.


Meiban Group (MEI SP; S$0.145 – BUY): The breakout could lift the stock towards the S$0.165-S$0.17 resistance next.

• The stock broke out of its consolidation triangle after taking out its resistance at S$0.14.

• Both indicators are still showing positive signs.

• Aggressive investors could buy on weakness but put a stop below the S$0.12 level. The breakout could lift the stock towards the S$0.165-S$0.17 resistance next. Other investors should just stand aside for now.


Venture Corp (VMS SP; S$4.00 – SELL): A breakdown below S$4.00 would likely see the continuation of a longer term downtrend towards the S$3.60-3.65 levels next.

• The stock has broken out above its medium term trend line resistance. However, it is currently trading below the 30-day SMA at S$4.16. The next resistance is at S$4.70.

• MACD is still marginally positive but RSI has hooked downwards. Mixed indicators suggest that it is still in consolidation.

• After failing to close above its 30-day SMA after trying 3 times, suggest that the buying momentum is weak. There should have been a rally after the breakout of its medium term trend line but it appears that there is none forthcoming. A breakdown below S$4.00 would likely see the continuation of a longer term downtrend towards the S$3.60-S$3.65 levels next.



Fundamentally…

Asia-Pacific Strategic Investments (APSI SP; S$0.145 - SELL): APSI reflected a net loss of S$1.8m for 2QFY09 as demand for pre-need burial niches continue to falter. Maintain our Sell recommendation but cut target price to S$0.11 (from S$0.14) based on 2x P/BV.

China Essence Group (CESS SP; S$0.215 – BUY): A muted 3Q with unit sales being offset by ASP decline and margin erosion on higher raw material price. Reducing forecasts to factor in higher potato cost and lower margin. TP raised to S$0.34 as peer CY09 P/BV has moved up to 0.5x from 0.4x previously.