PWROOT (Not rated). Yesterday, PWROOT rose 10.0 sen (5.0%) to halt its 6-day losing streak to close higher at RM2.10. Historically, we observe that buying support normally emerge whenever the stock retraced towards the RM2.00 mark. As showcased by yesterday’s performance, the stock indeed underwent a rebound play from its psychological RM2.00 level. Resurfacing of RSI and Stochastic from their respective oversold regions is also indicating that buying momentum is pilling up. As trading volume was lower than expected, we view that a swift strong volume break out from the RM2.20 (R1) mark is vital for the stock to reaffirm its rebound play. Next overhead resistance is seen at RM2.41 (R2), while supports are capped at RM2.00 (S1)/ RM1.90 (S2).

AAX (Not rated). AAX rose to an 18-month high yesterday, amid a 5.5 sen surge (13.6%) to RM0.46. The share price has been on an uptrend since its low of RM0.15 in August last year. In recent months, however, the share price had been mired by strong resistance at the RM0.41 level. Nevertheless, AAX’s share price finally punched through this crucial resistance yesterday to signal a continuation of its prior uptrend (“Ascending Triangle” breakout). From here, we expect AAX to be positively biased towards overhead resistance levels of RM0.50 (R1), RM0.58 (R2) and finally the Ascending Triangle measurement objective of RM0.65. Traders may consider buying now or on any pullback towards the RM0.41 (S1) resistance-turned-support. Further support is located at RM0.37 (S2) although a break below would be highly negative for the stock.

Source: Kenanga Research - 18 Aug 2016