· AXIATA (Trading Buy @ RM6.42). AXIATA was up 32.0 sen (5.52%) to RM6.12 on average trading volume. Chart-wise, a bullish pattern is emerging evident from the ‘Three White Soldiers’ candlestick over the last three days. The MACD is closing in on the Signal Line suggesting pre-emptive buy signal as soon as it crosses over. RSI and Stochastic have also picked up over the last three days, moving out of oversold territory. With momentum picking up at a steady pace, we recommend a ‘Trading Buy’ on AXIATA as we it could push toward RM6.42 (R2) should momentum sustain at current levels. We place a strict stop-loss at RM5.98 (S1) level as there remains a strong support.

· PCHEM (Not Rated). Yesterday, PCHEM advanced 42.0 sen or 7.81% to settle at RM5.80 supported by a surge in daily trading volume. Looking at the chart, the share price has been trading downwards since early of August, while “Bullish Engulfing” candlestick pattern was formed yesterday, signalling a potential reversal. Both Stochastic and RSI are reviving from the oversold territory, while MACD histogram is hooking upwards, implying buying interests is piling up. Should the buying interest persist, the share price could potentially rally towards 5.83 (R1) and RM6.02 (R2) next. Meanwhile, immediate resistance could be found at RM5.33 (S1).

· TOPGLOV (Stopped-out @ RM8.15). Yesterday, we issued a “Trading Buy” call on TOPGLOV with the anticipation that the share price will extend its gains towards RM9.25 target. However, the share price tumbled 60.0 sen or 7.06% to settle at RM7.90 due to heavy profit taking activity by investors. A long black candlestick has formed on the daily technical chart, indicating that the bears are outweighing the bulls in yesterday’s trade. Indicator-wise, both RSI and Stochastic are turning negative, reflecting the strong selling pressure. Thus, we are forced to close position from TOPGLOV as the share price hit our stop-loss level of RM8.15. Nevertheless, we might revisit the stock on fresh reversal signal. 

Source: Kenanga Research - 26 Aug 2015