Water-related stocks were again in the limelight, after news emerged that the Selangor state government and federal policy makers have signed a MOU to restructure the Klang Valley water sector. In particular, SALCON surged 4.5 sen to close at 74 sen on high volume. Chart-wise, the stock has broken out of a “Falling Wedge” pattern to signal a resumption of its prior uptrend. The MACD is also beginning to show signs of bullish convergence and this reflects the increase in buying momentum. Based on the chart pattern, SALCON could potentially commence a rally towards 99 sen. Traders looking to buy into the stock should target 3 bids below this level at 97.5 sen, with a stop-loss placed 3 bids below the 63 sen multi-month support at 61.5 sen.

 

Source: Kenanga