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Bar g ain Bu y
Technical Research Team
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Chart 1: AirAsia Daily
Weekly Trading Idea
Current Congestion An Opportunity To Bargain Buy…
M a l a s i a
M A R K E T D A T E L I N E
P P 7 7 6 7 / 0 9 / 2 0 1 1 ( 0 2 8 7 3 0 )
11 October 2010
Please read important disclosures at the end of this report.
Stock code 5099Last Close
52wk High RM2.2652wk Low RM1.07YTD Change RM0.79YTD % Chg 57.25%Trade Lot 100shrsShares out 2765.4mMarket Cap RM6000.9mFloat 1635.3m
AirAsia provides low-cost aircarrier service in SoutheastAsia. It focuses on providinghigh-frequency services onshort-haul, point-to-pointdomestic, and internationalroutes. AirAsia operates from2 hubs in Malaysia which areKLIA and Senai.
*sources from Bloomberg.
RHB ResearchInstitute Sdn Bhd
A member of theRHB Banking Group
Company No: 233327 -M
AirAsia is building another support base at above RM2.14.
AirAsia beganthe current uptrend since Jul 2010, when it rebounded across the key level of RM1.28. Its uptrend accelerated when it finally confirmed the removal of theRM1.66 resistane level in Sep. The stock hit a fresh historical high of RM2.26 inlate Sep, before encountering mild profit-taking activities in recent sessions.Although it ended slightly off with a negative candle on Friday, it still closed atabove the key level of RM2.14, and near the 10-day SMA of RM2.17. We viewthe current congestion as another base building phase.
The 2.618x projection target is at RM2.75.
Given both the 10-day and 40-day SMAs were firmly heading upward in supporting the current uptrend, wesee a solid support zone near RM1.90 – RM2.00 region in the medium term.More so, with the current base formed near RM2.14, we expect a next upsidetarget near RM2.75, which is at a level near the 2.618x Fibonacci Projectionlevel of the upswing from Dec 2008 – Aug 2009. As a result, the currentcongestion at above RM2.14 is viewed as an opportunity to bargain-buy thestock for another upward leg in the near future.
Strategy: Bargain buy near RM2.14 for a further rally ahead.
Target: IR = RM2.26 R1 = RM2.75
Support: IS = RM2.14 S1 = RM2.00 S2 = RM1.90
Exit: Cut loss if it falls to below the psychological level of RM2.00