PESTECH secured a 25-year power transmission contract in Cambodia and the share price registered a record high of RM5.36 (+4.08%), settling above all SMAs yesterday. The share price staged an upside break out of the Upper Bollinger band (which is also undergoing a bullish divergence) amid strong trading volume. The MACD has also managed a bullish crossover, signaling that an up-cycle is already in the making. We understand from historical studies that prices could extend their bullish trend, even if both RSI and Stochastics are in the overbought territory. Thus, we expect the momentum to rally the share price higher in the near-term. We are issuing a “Trading Buy” call on PESTECH with upside target of RM5.84 (R2). Correspondingly, a stop-loss of RM5.19 should be placed.

Source: Kenanga