VS (Take Profit @ RM1.65). Recall that earlier we recommended a “Trading Buy” on VS after the share price broke out of an “Ascending Triangle” last month (report dated 27-Jan @ RM1.51). Since then, the share price has performed to our expectation, and had in the past two days, reached our RM1.65 target price. Strong resistance had since emerged, as depicted by the recent days’ candlesticks (i.e. Long upper shadow/ Gravestone Doji). These serve as potential red flags that the bullish tide may be turning. At the same time, both the RSI and Stochastic indicators are heavily overbought. Hence, we do not discount the possibility of a pullback in the near term and suggest that traders lock in prior gains for a quick 14.0 sen/ 9.3% gain. Immediate resistances are RM1.65/1.68 (R1) and RM1.80 (R2) while downside support levels are RM1.55 (S1) and RM1.46 (S2).

PRESTAR (Stopped Out). Recall that we previously recommended a Trading Buy call on PRESTAR (report dated 25th Jan 2017), after the share price staged a strong rebound play on the back of healthy technical indicators. Nonetheless, the share price had failed to garner follow-through buying interest and consolidated before being hit with a heavy sell-down yesterday, triggering our stop-loss of RM0.87. In tandem with the heavy trading volume, daily RSI and Stochastic are also hooking down strongly to indicate a negative outlook ahead. All in all, we are forced to stop out on the stock and will reconsider another entry once the technical picture turns compelling again.

Source: Kenanga Research - 15 Feb 2017