· TEOSENG (TB, TP: RM1.93). Yesterday, TEOSENG gained 8.0 sen or 5.0% to settle at RM1.68 with the support of increasing daily trading volume. Chart-wise, TEOSENG reversed its downtrend after it managed to find support at RM1.20 level. A long white candlestick has broken above the downtrend trend line resistance and close above both 20 and 50 SMAs, suggesting the bullish bias. Both MACD and RSI indicators are trending upwards, while Stochastics is in the overbought territory. Should the buying momentum persist, the share price is likely to rally towards RM1.75 (R1) and RM1.93 (R2) next. With the positive sentiment from the lower raw material price, we are placing a “Trading Buy” call on TEOSENG with a target price of RM1.93. Stop-loss is pegged at RM1.57 (3 bids below the immediate resistance of RM1.60 (S1)).

· LTKM (NR). Similar to TEOSENG, LTKM reversed from its recent low of RM1.62. The share price has been consolidating over the past few days, while a bullish “Pennant” pattern is taking shape. Indicator-wise, MACD histogram is looking for a positive crossover in the Signal line, while RSI is relatively neutral. All in, we advocate investors to put LTKM in their watch list, and look for high volume breakout before entering the stock. The share price could rally towards our objective measurement target price of RM2.30 should the buying interests kick in, while an immediate support level could be found at RM1.83 (S1).

Source: Kenanga Research - 23 Jul 2015