SUCCESS (Trading Buy, TP@ RM2.14). SUCCESS had recently faced a technical sell-down by investors back in 26 August, wiping off 24% of its value within three days. The stock has since consolidated sideways for over the past two weeks before re-garnering investors’ interest during yesterday’s session, where it rebounded 18.0 sen (+10.6%) to close at RM1.87 on increased trading volume. Key technical indicators are looking promising with the bullish crossover staged by the MACD histogram, while strong uptick in RSI and Stochastic from their respective oversold region are suggesting that buying momentum has emerged strongly on the stock. With the positive-bias outlook, we reckon that the stock could look to stage a strong rebound play towards its psychological resistance level of RM2.00 (R1) soon, whereby a decisive breakout from the R1 level could see it climb further up towards our target objective of RM2.14 (3 bids below RM2.17 (R2)) in the near-to-mid term. We employ a strict stoploss level at RM1.71 (3 bids below RM1.74 (S1) level), with next support level envisaged at RM1.62 (S2).

MITRA (Take Profit). Recall that we had previously featured MITRA (report dated 13th May 2016) after the stock broke out from its ‘Symmetrical Triangle’ chart pattern on positive MRT-related news. Since then, the share price had offered a glimpse of positive rally but consolidated sideways for most of the period till-date. While still supported by its 200-day, the underlying trend is expected to persist on its range bound trading within RM1.35-RM1.45 in the near-term. This is further reinforced by the generally flattish looking momentum indicators. With our initial technical call turning invalid at this point of time, we opt to take profit on the stock for now while looking out for any new signs of re-entry in the future. Resistance levels are noted at RM1.40 (R1)/ RM1.45 (R2), while supports are located at RM1.35 (S1)/ RM1.30 (S2).

Source: Kenanga Research - 20 Sep 2016