Yesterday, EVERGRN (TB, TP: RM1.88) rose 10.0 sen or 6.1% to close at RM1.74 on strong buying volume. The share price was observed staging a rebound upon touching the -2SD regression level (S1: RM1.67) due to the weak market sentiment in the previous trading session. Indicators are showing strong buying momentum with Stochastics indicator rebounding from the oversold position while RSI indicator is also heading north. Hence, we decide to place a ‘Trading Buy’ on the stock in anticipation of a follow-through technical rebound play. Our target price is set at RM1.88 (R1), in line with 20-day SMA level while a strict stop-loss is set at RM1.67 (S1), its immediate support level.

SKPRES (TB, TP: RM1.55) managed to rebound 5.0 sen or 3.88% to close at RM1.34, settling above its 50-day SMA line after undergoing a correction for close to a month. At the same time, the stock also broke out from its immediate resistance-turned-support of RM1.30, backed by decent buying interest. Chart-wise, despite the MACD indicator still heading south, both RSI and Stochastic indicator are showing otherwise especially the Stochastic indicator which has just escaped from its oversold territory. Furthermore, historical trading pattern shows that the stock tends to stage a rebound whenever it approached its 50-day SMA level. Thus, we believe the share price could rally further to our measurement objective of RM1.55, which coincides with its +2SD regression level. Banking on a follow-through in buying interest, we are calling a “Trading Buy” on the stock with a strict stop-loss placed at RM1.22.

Source: Kenanga Research - 12 Aug 2015