• A leading water and wastewater specialist in Asia. Salcon is a premier water and wastewater engineering treatment specialist in Malaysia and other Asian regions since 1974 with a market capitalization of more than RM700m. Over the years, the Group has completed more than 900 water and wastewater projects in Malaysia, Thailand, Sri Lanka, Vietnam and China.
• Since share price tumbling to circa 61.8% FR level from the peak of RM0.955 on 21 Apr 2015, we deem the retracement was exhausted as Bullish Engulfing candlestick pattern emerged near 61.8% FR zone indicated reversal signal.
• MACD triggered “Golden Cross ” pattern, suggesting strong buy signal. RSI and Slow Stochastics have been increasing from trough on 8 July 2015, providing ammunition to buying momentum. Hence, we expect share price to fill the gap of RM0.805 (26 & 29 Jun), RM0.845 (25 & 26 Jun), and RM0.875. Supports at RM0.77 and RM0.755 (50% FR). Cut loss at RM0.74.

Source: Hong Leong Investment Bank Research - 21 Jul 2015