Since breaking above prolonged down-trend channel in mid-Apr, the share price rallied 76.9% in less than 2 months to a record RM2.30 yesterday. Even so, we believe that PENERGY has further distance to go. A “Flag” formation has taken shape on the daily chart, and yesterday’s 17 sen advance serves as confirmation of this bullish chart pattern. Furthermore, the key indicator such the RSI, Stochastic, and MACD has yet to show any major signs of weakening. As such we believe that the share price could potentially make its way towards RM2.75 next. Traders looking to buy into this strategy may do so now, whilst aiming to take profit at the RM2.72 level (3 bids below the measurement objective). In the meantime, a stoploss of RM1.97 should be employed. This implies an  upside of 19.8% versus 14.3% of downside risk.

 

Source: Kenanga