PPB [4065]: The Forgotten Giant

The share price of this KLCI constituent was hammered since last year due to the expected short-term poor performance of its 18.3%-owned associate, Wilmar, which contributes more than 50% of PPB’s earnings. After moving slightly lower than its book value in the end of December 2012, interests in this share started to kick-in and price began to move upward with high volume.

ppb2

After soaring by close to 20% earlier in January, PPB’s share price had since retraced and had been trading at a tight range. We can see from the chart that its recent price movement had successfully form an inverse head-and-shoulder (with 2 right shoulders in this case). And today, the share price managed to close above its neckline, giving traders the go signal. In the near term, price is expected to move up to test the RM13.16 resistance.

Let’s not forget to look at the big picture as well.

ppb1

Coincidentally, the medium term price movement of PPB is also creating an inverse head-and-shoulder. Unlike the short-term outlook however, it is not entirely bullish yet as the share price merely tested the neckline today before closing slightly lower. Moving on, we should observe this share closely as a break above the medium-term neckline could potentially send this giant back to its glorious height of RM15.20 or above, after successfully breaking though its high of RM13.90.

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