HLG Research: Take profit on UEM Land

HLG Research said UEM Land, as the master developer of Nusajaya with an enormous strategic land bank in Nusajaya at low carrying costs, the company is expected to benefit from the strong commitment to the project from the Government and the inevitable asset reflation amidst economic recovery.

“However, we advocate take profits amid overbought readings and excessive valuations, despite its long term positive outlook. Our three month technical price target is RM2.10 or 3.0 times price/book (in line with its two-year high of 3.4 times) on 1H10’s book value of 70 sen,” it said.

Last Friday’s hanging man candle could be seen as a prelude to more profit taking ahead. Easing below the five-day SMA of RM2.18 would suggest that the RM2.37 high is its medium term peak. Further resistance targets are situated around RM2.50-RM2.60.

“As the trend now favours the bears, we would advocate traders to turn defensive. Traders may want to unload into strength near resistance levels around RM2.37-RM2.50. If RM2.18 is violated, next downside targets are RM2.06 (38.2% FR from 3M low of RM1.57 and high of RM2.37) and RM1.97 (50% FR). Put a buy stop at RM2,” it said.