· JAKS (TB, TP: RM0.865) recently announced a proposed joint-venture with China Power Engineering Consulting Group Co. Ltd (CPECC) to invest in a coal-fired thermal power plant project on 6 Jul 2015. Its share price fell drastically post the announcement which we reckon was due to poor market sentiment and profit taking activities by traders. Chart-wise, the share price is rebounding from the -2SD regression line to close above all key SMAs. With the revival of FBMSC, coupled with both RSI and Stochastics reversing upwards, all these are indicating bullish-bias trading ahead. Thus, we are issuing a “Trading Buy” call on JAKS with a target price of RM0.865 (recent high), with a strict stop loss of RM0.66 (3-bids below the key support level of RM0.675 (S1)).

· SCGM (NR). To recap, we took profit on SCGM when the share price surged 30.0 sen to close at the high of RM3.70. Since then, the share price has consolidated towards the key support level of RM3.20 (S1). The primary trend remained positive, which is well supported by both the 50 and 100 SMAs. Low daily trading volume coupled with key momentum indicators such as RSI and Stochastics consolidating towards oversold territory are implying that this could be a good opportunity to accumulate. SCGM is one of the key beneficiaries of strengthening USD against MYR, and we advocate investors to lock in position while the share price is weak, with a short-term target price of RM3.75 (R1). Additionally, the company has announced a 1-for-2 bonus issue.

Source: Kenanga Research - 10 Jul 2015