IQGROUP (Take Profit @ RM2.85). IQGROUP notched a fresh 20-month high of RM2.88 before paring gains to RM2.83 for the day (up by 5.0 sen or 1.8%). Recall that we had recommended a “Trading Buy” on the stock earlier this month at RM2.61 (report dated 6-Jan). Now that our RM2.85 target price had been met, we see it appropriate to take profit in view of the oversold condition on the RSI. Furthermore, reaction highs such as the one observed in yesterday’s candlestick typically precede a period of downward consolidation. In this case, likely immediate support levels to be retraced are located between RM2.61-2.68 (S1). Overhead resistance levels include the RM2.85 (R1) channel resistance and RM3.00 (R2) psychological level further up.

EWEIN (Not Rated). EWEIN surged 6.5 sen (9.63%) to stage a technical breakout from its key multi-year resistance-turned-support level of RM0.73 (S1), closing at RM0.74 on strong trading volume. The up-trending MACD line is laying a positive bias outlook on the stock, supported by the rising bulls on the stock as showcased by the hook up in RSI. Should there be follow-through buying interest, EWEIN could set sights at RM0.79 (R1) and probably RM0.88 (R2) in the near-to-mid term. Meanwhile, investors should also take note of the long upper shadow candlestick formed acting as near term overbought momentum indicators. The aforesaid are suggesting that EWEIN could possibly face some selling pressure in the immediate term and undergo some technical pullbacks, where supports are found at RM0.73 (S1)/RM

Source: Kenanga Research - 17 Jan 2017