Morgan Stanley: Consider buying Neptune Orient Lines (NOL) on weakness

Since last Thursday, Neptune Orient Lines (NOL) (N03.SI) to close at S$2.00/share today. Sell volume versus buy volume is approximately at 8:1.

According to Morgan Stanley,

We think market concerns on freight rates and a volume collapse into 4Q10-2011 will result in short-term stock price weakness. Freight rates are likely to resume an upward trajectory from early 2011, which we will think will result in renewed confidence in container shipping stocks.

Morgan Stanley is suggesting buying on weakness on view shipping companies likely to remain “very profitable” in off-peak months. At current, Morgan Stanley has an Overweight call with $2.35 target.

S$1.95 looks to be the resistance.