PADINI (Trading Buy, TP@ RM2.79). PADINI has been consolidating sideways after reaching a high level of RM2.40 early of the month. After frequent attempts to retest the RM2.40 resistance, the share price has finally garnered strong trading volume to surge 9.0 sen (+3.81%) to close at RM2.45 yesterday. The underlying outlook is bullish-biased at this juncture, supported by the bullish convergence of the MACD histogram as well as strong uptick in RSI indicator in its healthy state of 67 points. From here, we reckon that the bullish technical breakout could rally the share price towards RM2.66 (R1) and possibly towards the target price objective of RM2.79 (3 bids below the RM2.82 (R2) resistance). Meanwhile, we recommend a protective stop loss to be placed at RM2.27 (3 bids below its RM2.30 (S1) support) while noting that the next support level is located at RM2.13 (S2).

RAYA (Not Rated). In yesterday’s trade, RAYA surged 4.5 sen (+18%) to finish at RM0.295 on trading volume, which rose to a 5-month high (6.3m shares). Until the earlier this year, the share price had been relatively thinly traded. However, RAYA’s share price broke out of its sideways trend at RM0.20 (January) and commenced a strong rally to a high of RM0.29 barely a month later. The share price had since been consolidating sideways with a mild downwards bias – that is, until yesterday’s breakout. With yesterday’s strong gains, RAYA’s share price has broken out of what resembles a “Bullish Flag”. This indicates that the share price is poised to resume its uptrend towards RM0.40. Traders may buy now, or on any weakness towards the RM0.25 support level. Resistance levels to look out for are RM0.30 (R1) and RM0.37 (S2) while support is pegged at RM0.25 (S1) and RM0.22 (S2). 

Source: Kenanga Research - 27 May 2016