TEKSENG (Not Rated). TEKSENG was under intense investors’ scope after its subsidiary – TS Solartech Sdn Bhd announced a sudden retrenchment programme that will see over 200 employees terminated immediately. TEKSENG saw its share price nose diving from RM1.27 on Monday (26-Sept) to RM1.04 yesterday, wiping off 18.1% of its share price value. Technically speaking, we observe that some buying supports have emerged from its multi-month support level of RM1.04. While the overall technical indicators are still on a bearish-bias display, it is noted that the stock is currently in oversold condition. Taking all these into consideration, we advocate investors to avoid catching a falling knife and await for a buy signal to emerge near the RM1.04 (S1) level. Should a rebound signal arise (breakout above RM1.06 (R1), the stock could set sight towards its next overhead resistance of RM1.16 (R2). On the flip side, failure to hold above its key RM1.04 (S1) level could see the stock retracing towards RM0.90 (S2).

ELSOFT (Not Rated). Yesterday, ELSOFT surged 9.0 sen (4.8%) to a 7-month high of RM1.96. Trading volume rose to 4 times the 30-day moving average. On the daily chart, the share price has broken out of a “Bullish Pennant” pattern. This signals a continuation after pausing for breath over the past two months. Similarly, the MACD has also completed a Signal-line crossover to reflect a pick-up in buying momentum. Hence, traders may expect the share price to continue chugging higher from here. Immediate resistance levels to look out for are RM2.00 (R1)and RM2.20 (R2) before reaching the “Pennant” measurement objective of RM2.35. Downside support is pegged at RM1.80 (S1) although a break below would be a huge negative. Further support is far below at RM1.60 (S2).

GKENT (Take Profit). Recall that we recently issued a ‘Trading Buy’ call on GKENT (report dated 8 Sept) after the share price broke out of its consolidation phase to signal a resumption of its prior uptrend. Since the buy call issuance, the stock had rallied further to achieve of target price objective of RM2.59 (pre-bonus TP is RM3.24) during yesterday’s intraday session. On the technical front, the primary trend of the share price is still positive as it is still being supported by major moving averages. Nonetheless, we observe that the stock had been overbought for a period of time. Hence, we take this opportunity to take profit on strength to secure a gain of 11.7%, and will look for a fresh ‘Buy on Weakness’ opportunity that arises in future.

Source: Kenanga Research - 29 Sep 2016