NOL

NOL: Morgan Stanley stay O/w, but decrease TP to $1.90 from $2.60. Unsustainably Low Freight Rates; Value Emerging. Expect weak 2Q11 results, pressure on earnings and visibility to remain low. But, stay OW as see a bottom:

1) freight rates are below cash breakeven;
2) capacity rationalization is starting;
3) management change in 2012 could help unlock 15% of value from terminal assets, Excluding terminals, shipping is already trading at 0.7x P/BV. Limited downside to freight rates and investor focus should now turn to the pace of freight rate improvement.

NOL: CIMB has Technical Buy Call. Note that share price may have found its short term bottom at S$1.35 a couple of weeks back. Thur’s bullish engulfing pattern could possibly mean that the bulls are ready to kick prices higher. House see a bullish divergence on its MACD and RSI. Its RSI is also at its highest level in two mths. Continue to expect buying momentum to pick up here.
Recommend aggressive traders should buy now with a stop placed below $1.395. Others should place their stop below $1.35, just in case the reversal fails to materialise. Tip prices to retest the long term resistance trend line at $1.63 in the short term once prices take out the $1.47 high again. Further breakout above $1.63 would suggests that the medium term trend has changed for the better.