SAM (Not Rated). In its 31-May announcement, SAM reported that major shareholder Singapore Precision Engineering Limited had sold 8.1m shares in SAM to a group of purchasers to make way for the conversion of 83.0m ICULS into 39.5m SAM shares. Consequently, SAM has maintained its compliance with the public shareholding spread requirement – removing a major overhang and instead paving the way for the share price to reach a 6-month high. Yesterday, SAM closed at RM7.65, up 19 sen (+2.5%) for the day. The share price has now confirmed a “Bullish Pennant” formation to mark a continuation of its prior uptrend. From here, it is expected that the share price to retest its upside resistances RM7.82 (R1) and RM8.28 (R2) before reaching the “Flagpole” measurement objective of RM8.92. Strong support is located at RM7.50 (S1) and RM7.32 (S2) below.

KESM (Not Rated). KESM surged 15.0 sen (3.05%) to stage a technical breakout from its ‘Flag’ chart pattern to close at RM5.06 on the back of stronger trading volume. While the overall technical picture is looking positive as showcased by the up-trending RSI and Stochastic, we view that the share price has yet to fully neutralise its overbought situation (as both indicators are still within close range of the overbought zone) since consolidating from its previous high of RM5.33. In this case, we do not discount a possibility of further sideways consolidation from this point. However, shall follow through buying interest picks up, KESM could look to retest its immediate resistance level of RM5.33 (R1) and any breakout from the R1 level could lead it towards the ‘Flagpole’ measurement objective of RM5.73 (R2) in the near-to-mid term. Meanwhile, support is seen at RM4.80 (S1) and RM4.50 (S2).

Source: Kenanga Research - 24 Jun 2016