SINOTOP (Not Rated).  In October, SINOTOP broke out of its year-long sideways phase (at 5.5 sen) after the company proposed a corporate exercise involving: (i) capital reduction and repayment, (ii) share consolidation, and (iii) diversification. Within just one month of the announcement, the share price tripled to as high as 14.5 sen before staging a healthy pullback to 9.0 sen just this week. Nevertheless, SINOTOP’s technical outlook remains positive, with the MACD still above the Zero-line and RSI beginning to inflect within the oversold zone. As such, we expect SINOTOP to resume its prior uptrend fair soon. Overhead resistances include 14.5 sen (R1) and should this be taken out, the next resistance would only be present at 17.0 sen (R2). Solid support should be present at 9.0 sen (S1), although a break below would be highly negative with 5.5 sen support (S2) next.

YONGTAI (Not Rated). Yesterday, YONGTAI rose 3.0 sen (2.3%) to a two-year high of RM1.33. Volume rose for the third consecutive day to 2.2m shares yesterday. Chart-wise, YONGTAI has been trading within a long-term trend channel since August last year. With the recent days’ bullish move, coupled with a MACD upwards hook, the share price appears poised for further gains in the near-term. Immediate resistance levels to look out for are RM1.35 (R1) and RM1.46 (R2). Conversely, strong support should be present at RM1.25 (S1) where investors may consider buying on dips. Red flags would be raised in the unlikely event the RM1.25 (S1) is breached in the near-term, with the next major support only present at RM1.00 (R2).

Source: Kenanga Research - 8 Dec 2016