GADANG (Not Rated). GADANG rose to a 7-month high of RM1.14 before ending the day up 2.0 sen (1.8%) at RM1.13. The share price has gained 24.5 sen (27.7%) since its RM0.885 low in December last year. Currently, GADANG’s overall trend is positive with the share price above all three key SMAs. More importantly, buying volume has been increasing over the past two days resulting in the 20-day SMA crossing over the 100-day SMA. At the same time, the MACD-Signal line crossover yesterday is also indicative of a rising bullish momentum. Hence, we expect GADANG to remain on an upward bias. Immediate resistance levels to look out for are RM1.17 (R1) and RM1.24 (R2). Downside support levels include RM1.06/1.08 (S1) where traders may consider accumulating. A breakdown of this support level will, however, be highly negative for the overall technical picture even though we expect some supports near RM1.00 (S2).

PELIKAN (Take Profit @ RM1.03). To recap, we previously recommended a Trading Buy call on PELIKAN (report dated 21 Dec 2016) after the share price has broken out from its multi-month downtrend resistance line. Since then, PELIKAN had trended up and achieved out target price objective of RM1.03 yesterday intra-day. Key indicators are rather toppish at this juncture, especially when the daily RSI and Stochastic are in deeply overbought position. With that said, we opt to take profit on the stock to secure a gain of 14.44% and will re-look the stock once its technical picture turns compelling again.

Source: Kenanga Research - 22 Feb 2017