· UMW (Trading Buy, TP: RM8.80) which has been undergoing a sell-down since April managed to find its footing at RM7.70, after it halted the downtrend by consolidating sideways with strong buying support. Technically, the MACD has performed a golden crossover on Monday (14- Sep) suggesting renewed buying while the RSI and Stochastic indicators have reversed from their deeply oversold territory (having trapped in the said level for the past two months), further underpinning the potential rebound play. We believe the share price could potentially rebound towards RM8.55 (R1) and subsequently RM8.80 (R2) which coincides with its mean regression and +2SD level, respectively. Hence, we are issuing a “Trading Buy” call on UMW with a target price of RM8.80 (R2) while a strict stop-loss of RM7.67 is placed (3 bids below the RM7.70 (S1) level).

· RHBCAP (Not Rated) managed to find a strong support at the RM5.89 level, while a “Double Bottom” chart pattern has been formed. The share price eventually staged a rebound from RM5.89, trending towards the resistance level of RM6.42. The MACD is expanding further while the Stochastic indicator and the RSI have both inched upwards, indicating a shift of momentum from bearish to bullish. That said, the short-term technical picture has improved significantly. Should the share price overcome the RM6.42 key resistance level with strong trading volume, further gains may be expected towards RM6.57 and RM6.78 next. Downside support remains pegged at RM5.89.

Source: Kenanga Research - 18 Sep 2015