July 20, 2010

JCY - CIMB Research: Sell on JCY Intl at RM1.48

Stock Name: JCY
Company Name: JCY INTERNATIONAL BERHAD
Research House: CIMB

KUALA LUMPUR: CIMB Equities Research has a Sell on JCY International at RM1.48, based on its technical charts. It is trading at a FY11 price-to-earnings of 8.0 times and price-to-book value of 3.2 times.

'The stock has fallen back to its debut price after hitting a high of RM1.98. The pullback has been severe and does not look like a correction. We expect further price weakness in the medium term as it is now forming a bearish flag pattern,' it said on Tuesday, July 20.

Prices could still push a tad higher from here but as long as it remains in the channel, that is below RM1.62 to RM1.65, the next leg is likely to be down since a flag is a continuation pattern.

A break below the RM1.44 would signal that prices are heading lower towards RM1.30, based on the height of the flag. There is also a good chance that it could even drop below RM1.30.

JCY International Bhd manufactures hard disk drive mechanical components.


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