TGUAN (Not Rated). TGUAN’s share price gained 15.0 sen (3.6%) yesterday to finish at RM4.36 on increased volume of 0.9m shares vs. SMAVG (20) of 0.2m shares. Yesterday’s move saw TGUAN breaking out from its 7-months downward consolidation and its 100-day SMA. We believe that this represents a strong reversal, as historically, the 100-day SMA has been particularly accurate in its buy/sell signals for TGUAN. Indicator-wise, MACD has just crossed above both Signal and Zero-line as momentum turned positive. Overall, we see the potential for TGUAN to punch through its immediate resistance level of RM4.40 (R1) before staging a retest of the May high of RM4.50 (R2), and possibly RM4.60 (R3) beyond. Downside support levels are RM4.20 (S1) and RM4.00 (S2) below.

VS (Not Rated). Yesterday, VS climbed another 11.0 sen (3.9%) to close at a fresh high of RM2.90. This was backed by healthy trading volumes with 9.6m exchanging hands – approximately 50% above its daily average. More importantly, yesterday’s move further supported the strong underlying rally since the beginning of the year. Momentum is still expected to remain positive, with key indicators still displaying healthy uptrends, while the share continues to trend above all key SMAs. From here, expect upward momentum to continue before meeting some resistances at the psychological barrier of RM3.00 (R1), with another resistance higher up at RM3.18 (R2). Conversely, in the event that buying interests succumbing to profit-taking, the share may potentially find some consolidation at RM2.68 (S1). A break below would be highly negative, with the share expected to capitulate towards lower support at RM2.37 (S2).

Source: Kenanga Research - 6 Oct 2017