PESONA (Not Rated). PESONA has completed a ‘rounding bottom’ chart pattern with a surge yesterday, breaching above its resistanceturned-support level of RM0.655 (S1) by closing up 3.5 sen (5.34%) at RM0.69. The underlying outlook is positively intact, supported firmly by all its up trending SMAs. The positively-inclined RSI is suggesting a strong bull case to climb further up, while the MACD line is also making a positive comeback from its zero-line to lay a hand on the positive-bias outlook. Nonetheless, we opine that the stock could undergo a healthy pullback in the immediate term given its overdone rally and toppish short-term signal displayed by the overbought Stochastic. Thus, any pullback towards the RM0.655 (S1)/RM0.63 (S2) levels could be a good support zone to accumulate on the stock. Upside is capped at RM0.73 (R1)/RM0.77 (R2).

INNO (Take Profit @ RM1.45). INNO has been setting higher highs and troughs since our initial Trading Buy recommendation back in 4 Jan 2017 (LP: RM1.20, TP: RM1.73). Nonetheless, the regressing technical readings (MACD staging a bearish crossover, south trending RSI and rolling over of overbought Stochastic) are suggesting the waning momentum on the stocks, hinting possibility of the stock undergoing a consolidation mode. Given the likely tepid outlook in the immediate term, we opt to secure profit on the stock (20.8% gain) for now while we will relook for a more favourable entry point again.

Source: Kenanga Research - 8 Feb 2017