Yuchengco’s construction arm, EEI Corporation (EEI) could start the new year on a positive note given its fundamental and technical prospects.
For those who does not know, EEI Corporation is one of the leading construction companies in the Philippines. Over the last couple of decades, it has constructed several notable power plants, refineries, buildings, flyovers and highways, etc. Given its know-how and experience in doing such projects, is it in the best position to benefit from the impending roll-out of the government’s Public-Private-Partnership (PPP) projects. EEI will not directly participate in these projects but will be the sub-contractor of choice by the winning companies like DMC, SMC, AC, MPI and so on. This in turn could ramp up its revenues for the next coming years which should reflect on its share price.
From a technical standpoint, EEI has recently broken out from either an inverted head and shoulders or a cup and handle pattern when it moved above the PHP 3.40 resistance. Its trading condition, however, is already overbought as can be seen at its RSI which means that it could first correct before it moves up again. Moreover, a presence of a shooting star pattern also indicate a likely dip in the very near term. Nonetheless, the neckline of the PHP 3.40 level should keep EEI afloat. Now, judging by the height of the pattern, EEI has a potential to reach at least PHP 4.00 if it is able to keep itself above PHP 3.40.
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