· SALCON (Not-rated). SALCON surged 6.0 sen (9.6%) yesterday on very strong trading volume to settle at RM0.685, after an industry report highlighted a possibility of revival in water contracts. Its share price staged a technical breakout from its ‘Pennant’ chart pattern as well as its multimonth downtrend resistance to settle just below its 200-day SMA level. Key momentum indicators are upbeat on its technical outlook, underpinned by strong upticks seen in RSI and Stochastic. We view that the share price must swiftly capture the 200-day SMA level to reaffirm its uptrend trajectory, as investors could set sight for the stock to retest its next resistance level of RM0.72 (R2).

· TALIWRK (Not-Rated). TALIWRK also benefited from the positive water play sentiment recently as it rose 8.0 sen (5.71%) to close at RM1.48 on the back of strong trading volume. The share price has rebounded off the lower support level of a ‘Symmetrical Triangle’ chart pattern to settle above all its key SMAs. The underlying outlook is also boosted by the upticks in both RSI and Stochastic, with the latter from its oversold territory, to suggest an upside-bias outlook. Due to the current sluggish market sentiment, we advocate investors to look out for a technical breakout from its ‘Symmetrical Triangle’ chart pattern at RM1.50 (R1) before entering the stock.

Source: Kenanga Research - 13 Nov 2015