GESHEN (Trading Buy, TP: RM2.39, SL: RM1.54). Since its RM2.97 high in December last year, GESHEN share price had more than halved to as low as RM1.31 last month. Nevertheless, the share price appears to have bottomed out and is now showing early signs of a renewed uptrend. Yesterday, GESHEN rose 12 sen (+6.9%) to a 4-month high of RM1.86. This follows the “Golden Crossover” between the 20-day and 50-day SMA earlier this month. At the same time, the MACD indicator is also on a rising trend and this reflects a build-up of positive momentum. Hence, we expect GESHEN to climb higher over the coming months. The next resistance levels to look out for are RM2.00 (R1) and RM2.42 (R1). Downside appears limited with support at RM1.74 (S1) and RM1.57 (R2) next.

KAREX (Not Rated). KAREX has been trading on a downtrend pattern for the past 6 months since reaching a high level of RM3.16 back in January this year. Yesterday, the share price has surged 15.0 sen (+6.76%) to stage a technical breakout from its multi-month downtrend resistance line to close at RM2.37. MACD histogram is currently conducting a bullish convergence, while the strong hook up seen by RSI and Stochastic are reinforcing the bullish play. Shall follow-through buying interest persist on the stock, we reckon KAREX could look to reverse from its downtrend trajectory and seek to climb higher towards RM2.52 (R1) and possibly RM2.75 (R2) next in the near-term. Interested investors should be aware that its immediate support level now lies at RM2.25 (S1) with next level seen at RM2.13 (S2).

Source: Kenanga Research - 29 June 2016