EG (Not Rated). Electronic manufacturing services (EMS) player EG rose to a 9-year’s high of RM1.11 yesterday before finishing the day higher by 5.0 sen (+4.8%) at RM1.10. Earlier last week, wire news reported that the company plans to invest about RM30m in a new manufacturing facility to expand the Group’s scope of EMS to include box-build and serve a broader clientele. Chart-wise, EG’s share price has broken out of a “Bullish Wedge” formation to signal a resumption of its prior uptrend. The MACD has also completed a signal-line crossover to reflect a build-up in buying momentum. From here, we expect further gains towards the RM1.30 (R1) measurement objective (MO). Traders may look to buy now, with a target price 3 bids below the MO at RM1.27, At the same time, losses should be contained with a stop-loss of RM0.985 (3 bids below the RM1.00 support (S1).

MRCB (Not Rated). MRCB has been consolidating over the past 2 months after it reached a high of RM1.52. We observe that the share price is looking to form a ‘Rounding Bottom’ chart pattern, as it settles above its 50-day SMA level yesterday. Trading volume is seen to be increasing in tandem with the MACD undergoing a bullish convergence, laying a hand on the bullish bias outlook. All in, we reckon that the share price could look to complete its ‘Rounding Bottom’ chart pattern to retest its previous high level of RM1.52 in the next one month period. Immediate support and resistance is marked at RM1.26 (S1) and RM1.36 (R1) next.

Source: Kenanga Research - 30 Dec 2015