HLIND (Not Rated). HLIND surged 35.0 sen (5.1%) to RM7.19 after the company announced a 27.4% YoY jump in its 3Q16 earnings a day earlier. Trading volume was markedly higher at 431k shares. On the daily chart, the share price has broken out of a “Bullish Flag” formation to signal a continuation of its prior run-up (17th-21st March). Coupled with the MACD and Stochastic indicators which remain bullish, we reckon that the current rally still has some distance to go. From here, expect a further climb to RM7.44 (R1) (123.6% Fibonacci Projection) before reaching the “Flagpole” measurement objective of RM7.90 (R2). Downside support levels are RM6.84/RM6.90 (S1) and RM6.62 (S2) further down.

PADINI (Not Rated). PADINI attracted immense investors’ interest after an industry analyst report mentioned that the company could benefit from the Ringgit recovery which would lower its imported inventory cost. Yesterday, the share price surged 6.0 sen (2.9%) to stage a breakout from its 2-month downtrend resistance line and settle at RM2.13. On the back of the strong trading volume, the RSI has also broken out from its resistance line to lend a hand on the positive rally. On a side note, although the MACD has staged a bullish crossover, it has yet to break its downtrend at the moment. Besides, PADINI could face strong resistance at the RM2.23 (R1) level while the recent strong rally also appears overdone in such a short time frame. Hence, we advocate conservative investors to look out for a decisive breakout away from the R1 level before entering the stock, as failure to do so could induce a consolidation phase to neutralise the stock’s overbought situation (showcased by Stochastic). Resistance level is seen at RM2.23 (R1) and RM2.45 (R2), while supports are limited at RM1.94 (S1) and RM1.82.

Source: Kenanga Research - 21 Apr 2016