COASTAL (NR). COASTAL fell 19.0 sen or 10.3% to RM1.65 yesterday, in tandem with the weak overall market sentiment. Chart-wise the share price is trading below all its SMA lines and also the mean regression line, showcasing a downtrend. Negative MACD movement is signalling the bearish outlook while buying momentum is weak with both Stochastics and RSI indicators in the oversold region. As the share price looks to retest its 3-year low level of RM1.48 (S2) in the near-term, we reckon that this could be a good opportunity to enter the stock, underpinned by its deep oversold condition. Thus, we advocate investors to spot for reversal signal if the share price touches the next significant support level.

PCHEM (Stopped Out, RM6.00) We had previously recommended a Trading-Buy for PCHEM with a TP of RM6.82 based on an anticipation of a strong volume break-out from the ‘Triangle-chart’ pattern, with a stop loss at RM6.00. However, share price has been bashed down along with the market in recent weeks, causing the share price to consolidate below the 100-day SMA level, while RSI and Stochastic have been dragged down to oversold levels. In light of weak market sentiment, we foresee that the share price would continue on a downtrend for the mid-term and we are stopped-out of our position as the stop-loss level was triggered. However, we would continue to monitor PCHEM closely to seek out a potential reversal play should the market stage a rebound. 

Source: Kenanga Research - 18 Aug 2015