KUALA LUMPUR: CIMB Retail Research has a Sell call on Tanjung Offshore at RM1.53, which is trading at FY11 price-to-earnings of 9.6 times and price-to-book value of 1.2 times.

In its technical outlook on Tuesday, July 27 it said the bearish engulfing pattern formed yesterday suggests that the RM1.59 high could probably be its near term peak.

If the candles fail to take out this resistance soon, expect further weakness in prices as the candles would likely swing towards the RM1.45-RM1.38 zone. The 38.2% FR at RM1.34 could also be a magnet for prices.

Indicators are showing signs of exhaustion. MACD histograms are losing some momentum here while its RSI has also hooked downward.

“Unless the RM1.59 level is taken out, we would rather stay defensive in the immediate term. Our strategy is to unload on strength,” it said.