Thong Guan Industries jumped and touched the RM4.90 resistance level. With the momentum indicator RSI pointing upwards, coupled with higher trading volume, we see that there is a possibility it will experience a technical breakout. If this happens, expect it to travel towards the short-term target prices of RM5.20 and RM5.40. The downside support is anticipated at RM4.70, whereby traders may exit on a breach to avoid the risk of a further correction

Trading Call: Buy on breakout RM4.90

Target: RM5.20, RM5.40 (time frame: 2-4 weeks)

Exit: RM4.70

Source: AmInvest Research - 18 Aug 2020