DKSH (Not Rated). Yesterday, DKSH surged 31.0 sen (5.3%) to finish at a 1.5-year high of RM6.11. On the daily chart, the share price has been on a uptrend since June, having gained by as much as 66% from the RM3.68 low (29-June). Regardless, the technical picture remains bullish with DKSH’s share price firmly above all three key SMAs. The MACD is also on a healthy uptrend. In fact, yesterday’s bullish move also confirmed a “Pennant” breakout – indicating that the share price is poised to resume its climb after a month-long pause. From here, expect the share price to climb towards the “Flagpole” measurement objective of RM7.24. In between, expect some resistant pressure at RM6.38 (R1) and RM7.00 (R2). Downside support at RM5.70 (S1) should be there to cushion selling force although a vialation below this level would be highly negative.

CANONE (Not Rated). CANONE has been consolidating downwards to form a ‘Wedge’ chart pattern. After trading range bound within RM3.17-RM3.64 over the past four months, CANONE finally seen rekindled buying interest to confirm a bullish wedge reversal above its downtrend resistance trend line of RM3.50 and channel resistance level of RM3.64, settling 21.0 sen (5.9%) higher at RM3.74. MACD histogram has converged bullishly above its zero-line to lend a hand on the bullish bias outlook, with upside envisaged at RM3.93 (R1) and possibly RM4.40 (R2) in the near-to-mid term. Nonetheless, the deep overbought condition seen by the Stochastic indicator suggests that conservative investors could look to pick up the stock on any short-term retracement towards RM3.64 (S1). Next support level is located further south at RM3.17 (S2).

Source: Kenanga Research - 12 Oct 2016