EG INDUSTRIES BHD

Periodically,  TCB will pick a stock we may like to trade short term.  So, this week, TCB have selected the stock, EG as our *Stock In Focus (SIF)*.  Please do not take this as a buy signal as our TA reading for these stocks are for sharing purpose only.  Do calculate your own risk/reward ratio if you decided to trade this counter. 

Background Information

EG Industries Berhad ("EG") was first listed on the KLSE in 1993 under the name of Dai-Ichi Industries Berhad. Today, EG as an investment holding company, operates through its subsidiaries that include SMT Technologies Sdn Bhd, which is engaged in the provision of electronic manufacturing services for computer peripherals, telecommunication and consumer electronic/electrical products industries ; Mastimber Industries Sdn Bhd, which is engaged in the manufacture and sale of two layer solid wood parquet flooring ; EG Wireless Sdn Bhd, which is an original equipment manufacturer/original design manufacturer (OEM/ODM) in complete box built products, and SMT Industries Co Ltd, which is engaged in the provision of electronic manufacturing services (EMS) for computer peripherals, telecommunication and consumer electronic/electrical, and automotive industrial products industries. It has operations in Malaysia, Singapore, Europe, the United States, Korea and Thailand.

After the announcement of its last quarter results ended 31^st Dec 2014 on 26^th Feb 2015, EG began to attract attention with trading volume reaching a high of 7.7 mil shares traded on 27^th Feb 2015.

Technical Analysis

EG is currently bullish after hitting a bottom at 0.455 which marked the end of its correction phase.

--Weekly Chart of EG--

The weekly chart's formation of the 3 white soldiers confirms the bullishness of EG. It is expected to break above RM 0.865 decisively with volume which should see it moving towards its 1^st resistance of RM 0.90 and subsequently onward to challenge its strong resistance at RM 0.94. It should enjoy an immediate support at RM 0.78.  A successful take out of the resistance at RM 0.94 will see it trend towards its 1st target price of RM 1.00 before moving towards a final target of RM 1.11.

--Daily Chart of EG--

On the daily chart, after closing the past two days with a doji pattern, it closed with a bullish engulfing pattern on 11/3 reaffirming its bullish trend.  It has been consolidating after attempting to break the high of 0.855 on 5/3.  It tested the RM 0.865 resistance on 11/3 but ended up closing at RM 0.85 mainly due to heavy T4 selling pressures. It is poised to further its uptrend and It is expected to break RM 0.865 anytime soon to move towards its target prices of RM 1.00 and RM 1.11 respectively. Stop-loss if RM 0.775 is violated.

Key notes

EG’s latest quarterly report for financial period ended 31/12/2014 reflected a very much improved financial performance.  (http://www.bursamalaysia.com/market/listed-companies/company-announcements/1886685)