JHM (Take Profit). Since our Trading Buy recommendation on JHM (10-Aug @ RM1.35), the share price had risen to a high of RM1.50 before succumbing to profit taking over the subsequent weeks. Yesterday, the share finished at RM1.41, up by 2.0 sen (1.4%) for the day. Chart-wise, JHM’s technical outlook has deteriorated in recent weeks with the 20-day SMA now in a “Dead Cross” with the 50-day SMA. At the same time, the MACD is showing clear signs of “Bearish Divergence”. These indicate that the share price may be toppish at these levels. As such, we are closing out our Trading Buy position for now and suggest that investors sell on strength towards the previous RM1.50 (R1) high. Further resistance is located at RM1.60 (R2) while downside support levels are RM1.24 (S1) and RM1.08 (S2).

PESONA (Not Rated). Yesterday, PESONA gapped up 1.5 sen (3.6%) to close at RM0.43 to break out from its 11-month ‘rounding bottom’ chart pattern formation. The underlying trend looks encouraging as the share price is currently trading above all its key moving averages. MACD histogram has also staged a bullish convergence to rebound away from the zero-line, while the up-trending RSI is reflecting the incremental bulls. From here, follow-through buying interest could carry the share price towards a higher high at RM0.455 (R1) and possibly RM0.490 (R2) in the near-to-mid-term. Nonetheless, we observed that the RSI and Stochastic are close to their respective overbought threshold. Hence, we do not discount possibilities of a slight retracement in the near-term to neutralise the aforesaid condition. Any retracement towards its immediate support level of RM0.42/0.40 (S1) would be a good entry opportunity. Next support level is RM0.37 (S2).

Source: Kenanga Research - 20 Oct 2016