MAYBANK (Trading Buy, TP: RM9.19). Yesterday, MAYBANK surged 24.0 sen or +2.93%, ending at RM8.43. The share price has been battered in the past week, losing approximately 10% of its value at the worst point. Chart-wise, the share price managed to hold above the key support level of RM8.20 (S1). Moreover, both Stocshastic and RSI indicators are reviving from the oversold territory, and coupled with the sharp upwards move yesterday penetrating the lower Bollinger Band, this suggests that a short-term rebound may be on the cards. Additionally, based on consensus dividend forecast of 5.7 sen, MAYBANK currently offers dividend yield of c.7.0%, which could potentially spur investors’ interest to look into this stock. All in, we are placing a “Trading Buy” call on MAYBANK with a target price of RM9.19 in the long term, while a strict stop-loss at the psychological support level of RM8.00 (S2) should be placed.  

· AFG (NR). In tandem with the recent market sell down, AFG broke down below the 1-year trading range of RM4.50-RM5.00. Currently, the share price is retesting the sustainability of the RM3.59 lows. The MACD is seen expanding downwards to indicate an increase in downward momentum. The 14-day Stochastic oscillator has also declined notably and dipped into the oversold region to reflect the recent sell off. Nevertheless, as it stands, the immediate resistance level is a fair distance away at RM4.09 (R1), while downside is likely to be limited at RM3.59 (S1). Thus, with the limited downside risk, we advocate investor to look out for a strong rebound signal before entering this stock.

Source: Kenanga Research - 19 Aug 2015