SALUTE (Not Rated). Yesterday, SALUTE’s share price rose 6.0 sen (4.3%) to a two-month high of RM1.46 amid a spike in trading volume to 2.3m share (vs. the daily average of 0.28m). Notably, the share price has broken out of a six-month downtrend channel and showing signs of having bottomed-out. In fact, momentum indicators such as the MACD and RSI have turned bullish and are suggesting that the share price is poised for a recovery. From here, expect a retest of RM1.50 (R1). Once taken out, the next resistance to target is RM1.65 (R2) further up. Any weakness towards the RM1.41 (S1) support can be viewed as a potential entry point, although a break below the next support at RM1.30 (S2) would be highly negative.

MLGLOBAL (Not Rated). MLGLOBAL gained an impressive 8.0 sen (6%) yesterday, closing at its all-time high of RM1.40. This was accompanied by a second consecutive day of exceptional trading volumes, with 2.7m shares exchanging hands yesterday – almost 5-fold its 20-day average. Notably, yesterday’s move marks its first breakout from a 3-month long sideways consolidation, potentially signalling a continuation of a prior uptrend. Likewise, the share price continued to lead all key SMAs upwards, with upticks seen in key indicators, suggesting a favour towards the upside at this juncture. From here, we expect the share to trend towards overhead resistances at RM1.46 (R1) and RM1.53 (R2). Conversely, downside supports can be identified at RM1.30 (S1) and RM1.25 (S2).

Source: Kenanga Research - 26 Oct 2017