· GDEX (Trading Buy, TP: RM1.14). GDEX has been trending in a downtrend since April and finally managed to find a strong support at RM0.82 level from where it staged a reversal supported by strong volume. Chart-wise, a long white candlestick has formed, implying that the bulls are outweighing the bears in yesterday’s trade. The 14-day Stochastic and RSI indicators have reversed from oversold territory to signal a pick-up in bargain hunting activities, and we reckon that the share price could potentially rebound towards the RM1.06 (R1) and RM1.14 (R2) Fibonacci Retracement levels. Thus, we are issuing a “Trading Buy” call on GDEX with a target price of RM1.14 (R2). Meanwhile, a protective stop-loss of RM0.96 (S1) should be placed.

· MIECO (Not Rated). MIECO recently garnered substantial trading interest underpinned by its stronger earnings results as well as the recent M&A hype surrounding the sector. The stock made a sharp leap to settle at RM0.935, on the back of strong buying volume. Chart-wise, a strong bullish white candlestick has formed with a breakout from a ‘Symmetrical Triangle’ chart pattern, suggesting that share price is likely to continue riding on the bullish uptrend. Key-indicators-wise, MACD traded above its positive Signa Line while RSI indicator is hooking upwards, indicating a bullish trend to support the technical breakout. However, Stochastic indicator has made a sharp spike into the overbought territory, suggesting a possible reversal. Hence, should buying interest persist, we expect a rally towards its immediate resistance level of RM1.03 (R1). The immediate support level is placed at RM0.82 (S1).

· HEVEA (Take Profit @ RM1.17). To recap, we previously placed a trading buy call on HEVEA after the share price surged on the back of a stronger set of 2Q15 results and news regarding a potential M&A with SHH Resources Holdings Berhad. The share price has since rallied according to our expectations and met our target price of RM1.17 in merely four trading days. However, key momentum indicators (Stochastic and RSI) have ventured into the overbought territory while the trading volume has started to wane. As such, we reckon that the share price could potentially consolidate in the near-term to neutralise its overbought situation. Thus we are taking profit on the counter for now, while we will re-look at the stock once a more compelling technical picture arises.

Source: Kenanga Research - 9 Sep 2015