PUNCAK (Not rated). Yesterday, PUNCAK rose 6.0 sen (5.3%) to close at a 2-month high of RM1.19. This bullish move marks a breakout above the multi-month resistance level of RM1.17. In addition, the recent breach above its multi-month downtrend resistance line also signalled an end to its downtrend trajectory. Positive showing from the indicators (bullish MACD crossover above the signal and zero line, and uptick from the RSI), coupled with yesterday’s high trading volume may be indicative of underlying buying momentum. Investors can also take the recent “golden crossover” by the 20-day and 50-day SMAs as another signal to enter the stock. With that said, further upside is expected from here while overhead resistance are set at RM1.26 (R1), with another resistance higher up at RM1.32 (R2). Downside support can be identified at RM1.05 (S1), with another lower resistance pegged to the bottom of the previous downtrend at RM0.99 (S2).

KAREX (Not rated). Earlier in the year, KAREX commenced a downtrend which saw its share price retreating 32.6% from a high of RM3.16* (January) to as low as RM2.13 (June). Nevertheless, the share price appears poised for a major reversal, as evidenced by the breakout above the downtrend line in late-June as well as yesterday’s confirmation of an “Inverted Head & Shoulders (IHS)” pattern. The MACD is also on a rising trend, and this indicates that momentum has turned bullish. From here, we expect the recovery to continue towards RM2.60 (R1), before reaching the IHS measurement objective of RM2.76 (R2). Traders may enter now, or on any pullback towards the RM2.45 (S1) neckline. Further support is located at RM2.33 (S2) although a break below would be a huge negative.

Source: Kenanga Research - 10 Aug 2016