Technical Analysis Opinion
Based on technical analysis, CIMB’s share price has still room to climb provided it break the strong resistance of RM6.80. Which the stock has tried 3 times and is now approaching the RM 6.80 mark again. However this time with stronger volume and increasing RSI.
If CIMB does manage to break the RM 6.80 mark, then it would have a potential upside of 8.4% which equates to Target Profit 1 (TP1) of RM 7.40. Should it surpass RM 7.40, then the second TP will be at RM 7.60.
Employees Provident Fund (EPF) has been aggressively increasing its skate in CIMB in the past few months. As of June 5th , EPF’s stake in CIMB was at 11.86% and increased pass 13% on 28th June when EPF acquired 32 million shares. This lead to CIMB closing strong on very high volume as indicated in the charts.
Similarly, Kumpulan Wang Persaraan Diperbadankan (KWAP) has increase its stake to a total of 507,631,427 shares from 469,545,827 shares. The interest from these major funds will be the pushing force behind the share price.
Fundamentals and Outlook
CIMB currently has a positive outlook. The group posted highest recorded 1st quarter profits of RM1.18 billion and has double digit growth in the loans industry.
CIMB is also plans to expand in ASEAN, opening its first Vietnam Branch in December 2016. Furthermore, stronger forecasted growth in Indonesia and the Philippines is expected to bolster CIMB’s profits.
CIMB has potential to grow further and post results this 2017. Should the share price break the resistance of RM6.80, there is a good chance it will rally pass RM7.00 and hit TP1 of RM 7.40.
*This is a summary about the outlook of CIMB’s share price, it is not a buy or sell call. Decisions in the share market are entirely up to the individual and the author shall not be responsible for anything.