PENTA (Not Rated). Yesterday, PENTA rallied 4.0 sen (6.6%) to close at RM0.65 on high trading volume. On the daily chart, the share price has broken out of a “Double-Bottom” formation, following a year-long prior downtrend. As a result, a major bullish reversal is on the cards which is supported by the Stochastic indicator which has also hooked upwards from oversold level. From here, we expect the bullish momentum to continue towards the “Double-Bottom” measurement objective of RM0.68 (R1). Further up, resistance is likely to emerge at RM0.75 (R2). Downside support is now located at the neckline resistance-turned-support at RM0.62 (S1) and last month’s low of RM0.56 (S2).

ASIAPLY (Not Rated). ASIAPLY surged 3.0 sen (14.63%) to stage a breakout away from its downtrend channel yesterday to close at RM0.235 on the back of strong trading volume. RSI indicator has also hooked up strongly to lend a hand on the bullish move, putting a halt to its 3-month consolidation phase, albeit venturing into the overbought zone. We view that follow-through buying interest would likely lead the share price to retest its immediate resistance level of RM0.245 (R1) and possibly RM0.27 (R2) next. On the flip side, we still advice interested traders to take a more cautious approach as we deem yesterday’s rally as overdone, in such a short time frame. The overbought situation could possibly induce profit taking by traders with the share price likely to see downside retracement towards RM0.225 (S1) and possibly RM0.21 (S2).

Source: Kenanga Research - 7 Apr 2016