Yesterday, SAB surged 11 sen (closing: RM3.98) to stage a 2-month resistance breakout of a ‘Falling Wedge’ pattern on the daily chart. Sentiment for this stock has been upbeat after they announced 99% ownership of a company, Pembinaan Gejati Sdn Bhd, via subscription of 136.9m new shares of RM1.00 each. Technicals-wise, the stock gapped up and formed a bullish ‘Marubozu’-like candlestick, suggesting that buying interests were firm. Coupled with the bullish readings from key momentum indicators, we expect follow-through buying interest to carry the share price to retest its next resistance level of RM4.22 (R1) fairly soon. Beyond this level, the next major resistance is located further up at RM4.55 (R2) and RM4.76 (R3). We believe the share price could rally towards RM5.27 ‘Flagpole’ objective measurements. We suggest traders who buy into the share to take profit at RM5.25, while placing a stop-loss at RM3.85.

 

Source: Kenanga