CIMB Retail Research has a sell on industrial chemicals supplier Luxchem Corp Bhd at RM1.15.
The research house said on Wednesday, July 21 Luxchem has been a good trading stock since October 2009 as prices were moving between the 90 sen and RM1.20 range for the past few months.
“If history repeats itself, traders should use any rebound to unload on strength. For the past three attempts, it failed to inch past the RM1.20 resistance trend line and we think it will be indifferent this time around,” it said.
CIMB Research said the bearish divergence on MACD suggests that momentum has faded. Its RSI has also hooked down from the overbought territory.
“Traders may want to offload some position now as we anticipate strong resistance head. Even if RM1.20 is taken out, the bears at RM1.27 will also keep the bulls at bay,” it said.
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