August 10, 2010

TGOFFS - CIMB Retail Research: Sell Tanjung Offshore into strength

Stock Name: TGOFFS
Company Name: TANJUNG OFFSHORE BHD
Research House: CIMB

KUALA LUMPUR: CIMB Retail Research advises traders to sell Tanjung Offshore into strength as long as prices remain below RM1.80, the odds still favour the bears.

It said on Tuesday, Aug 10 that Tanjung Offshore is hovering at the upper band of its rising channel. The resistance trend line remains in effect and this will likely limit the upside potential of the stock in the near term.

'Unless prices can take out the RM1.72-RM1.76 levels, we think correction is imminent,' it said. At RM1.64, Tanjung Offshore is trading at a FY11P/E of 10.0 times while price-to-book value is 1.3 times.

CIMB Retail Research said indicators are showing signs of exhaustion. MACD is poised for a negative crossover soon while its RSI has also hooked downward. Next downside targets are RM1.60, RM1.45 and RM1.33.

'As long as prices remain below RM1.80, we believe the odds still favour the bears. Hence, selling into strength seems to be the best option here. Put a buy stop at RM1.80, just in case,' it said.


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