CIMB & RHBCap: Merger Termination & Celebration

The purported termination of the proposed merger between CIMB, RHBCap & MBSB comes as a relief to the market. We can see that CIMB & RHBCap are both rallying this morning on newspaper reports on this development (here & here).

From the chart below, we can see that COMB & RHBCap have each dropped by 25-30% over the past 5 months- more than the decline in the overall market. CIMB is now testing its downward channel, with resistance at RM5.46-5.50 while RHBCap has yet to test its downward channel resistance at RM8.10-8.20. An upside breakout above these resistance could signal the end of their downtrend and likely recovery of a substantial portion of the lost ground.

As such, CIMB & RHBCap could be good trading BUY. (Note: Careful discretion is still warrant in the current weak market.)


Chart 1: CIMB's daily chart as at Jan 13, 2015_9.30m (Source: ShareInvestor.com)


Chart 2: RHBCap's daily chart as at Jan 13, 2015_9.30m (Source: ShareInvestor.com)

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 & RHBCap.