RHBCap is poised for a bullish breakout

In June, EPF offered to acquire all outstanding shares & warrants of RHBCap at the price of RM4.7562 & RM1.7962, respectively. At the close of the offer [on July 18], EPF has raised its shareholding in RHBCap to 82.23%.

Prior to the closing date of the said offer, the share price of RHBCap was moving past the offer price to reach a high of RM6.25 on July 31. This could be due to speculation that EPF might not be able to secure sufficient acceptance to force the privatization of RHBCap & thus it might maintain the listing status of RHBCap . As many funds were still bullish on this stock, their buying had pushed the share price higher.

In the past 8 days, we can see the share price of RHBCap firming up again. An ascending triangle pattern has formed. A break to the upside of RM5.65 could trigger a test of the recent high of RM6.25. Alternatively, this potentially bullish pattern would frizzle out if the share price were to drop below the RM5.45 level.


Chart : RHBCap's daily chart as at September 19 (courtesy of Quickcharts)

Watch this stock closely. It could be good for a quick trade.