CIMB: A banking stock worth considering

CIMB dropped back substantially in the past 4 months, following the announcement of the merger with RHBCap & MBSB. The termination of the proposed merger was well greeted by the market and CIMB rebounded to an intra-day high of RM6.05 on Jan 14. Since then, the stock has eased off a bit. Is it time to consider buying CIMB?

From the monthly Chart 1, we can see that CIMB had in fact dropped to its long-term uptrend line that stretches back to 2001. The support for this long-term uptrend line is RM5.00-5.20.


Chart 1: Guoco's monthly chart as at Jan 22, 2015_4.00pm (Source: ShareInvestor.com)

From the daily Chart 2 below, we can see that the share price has pulled back to the horizontal line at RM5.60. If this line failed, the share price could find support at the next horizontal line at RM5.30.


Chart 2: Guoco's daily chart as at Jan 22, 2015_4.00pm (Source: ShareInvestor.com)

I believe that CIMB is a good stock for long-term investment at the current price. You may consider nibbling some at the present price of RM5.64-5.65.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of,CIMB.