Date: 26 September 2024
Broker: UOB Kay Hian Securities (M) Sdn. Bhd.
Overview of DRB-Hicom
DRB-Hicom (DRB MK) is a diversified company involved in several key industries, including automotive, services, and property sectors. The company is a prominent player in the Malaysian market, particularly known for its role in the automotive sector, which includes partnerships and operations with global automotive brands.
Market Data:
- Last Price: RM1.18
- Target Price: RM1.29 (near-term), RM1.38 (mid-term)
- Support Level: RM1.05
- Stop-loss: RM1.04
Technical Analysis and Buy Recommendation
UOB Kay Hian has issued a “Technical BUY” recommendation for DRB-Hicom, highlighting its recovery momentum and potential return of +16.9%. The stock price is gradually recovering and has moved above key short-term moving averages (7- and 21-day Exponential Moving Averages or EMAs), signaling a bullish outlook.
Key technical indicators are supportive of further gains:
- DMI Indicator: Shows that positive momentum is strengthening.
- Volume: The recent price increase has been supported by a higher trading volume, indicating strong buying interest.
Target Price and Timeframe
- Target Price 1: RM1.29
- Target Price 2: RM1.38
- Expected Timeframe: Two weeks to two months
The broker’s analysis suggests that DRB-Hicom’s share price is positioned to move higher in the near term, driven by technical indicators and rising investor sentiment.
Key Risks
Despite the positive technical outlook, there are risks associated with the stock, including:
- Stop-Loss Level: The stock has a stop-loss level at RM1.04, meaning if the price dips below this level, the technical buy recommendation would be invalidated, and further downside risk could emerge.
In conclusion, DRB-Hicom presents a compelling technical buy opportunity with favorable short-term price momentum and potential upside, making it an attractive option for traders looking for near-term gains.
