Highlights / Stock Picks of the Day - Eastern and Oriental Bhd ("E&O")

Recall that on the 30th of November, we recommended a 'buy' on E&O at RM1.57. The share price had since rebounded from the rectangle support to close at RM1.61 yesterday, though still shy of our RM1.65 target price. As the technical picture has turned from bullish to neutral, we reckon traders should remain cautious on this stock. The indicators are sending mixed signals, with the 14-day Stochastic and RSI indicators pointing towards a short term upcycle in contrast to the overall MACD trend is weakening.  As the approaches the cluster of resistances between RM1.62-RM1.65, we suspect the stock would come under some selling pressure, hence we reckon traders should employ a trailing stop-loss going forward. To that effect, the previous stop loss of RM1.49 should be moved up to RM1.55, representing two bids below yesterday’s low.

Source: Kenanga