Thong Guan Industries is consolidating and testing the RM5.30 resistance level. With its RSI indicator pointing upwards, coupled with higher trading volume, we think that there could be a technical breakout towards the short-term target price of RM5.55 followed by RM5.80. In this case, the downside support is marked at RM5.05, whereby traders may exit on a breach to avoid the risk of a further correction

Trading Call: Buy on breakout RM5.30

Target: RM5.55, RM5.80 (time frame: 2-4 weeks)

Exit: RM5.05

Source: AmInvest Research - 5 Oct 2020