Highlights / Stock Picks of the Day - DRB-HICOM ("DRBHCOM") – Not Rated

DRBHCOM has formed an upward sloping trend channel which spans almost a year. We like the stock from a technical standpoint, as the stock exhibits an obvious cyclical pattern and a decent trading range of 40-45 sen. At yesterday's closing price of RM2.45, the share price was up 3 sen after having briefly tested the channel support. The 'Inside Day' candlestick formed yesterday also marks a potential turning point for the stock, and this comes in tandem with the RSI indicator that has just emerged from oversold levels. All things considered, the stock looks to be bottoming, although we reckon that investors should watch for a more convincing signal (a white candlestick is needed today) before buying into the stock. Should a buy signal be triggered, the chart pattern implies a target of RM2.75. Meanwhile, immediate support remains at RM2.40.

Source: Kenanga