PENTA (Not Rated)

• Yesterday, PENTA gained 9.0 sen (+2.74%) to close at RM3.37.
• We note that a bullish candlestick was seen after 3 consecutive bearish candlesticks, potentially indicating a short consolidation phase is over and beginning of a continuation rally. We believe the share could be in the midst of testing its previous high of RM3.39 where a break above would confirm a breakout.
• Despite RSI being in the overbought territory, we note that in a rally, PENTA tends to stay in the overbought territory and a similar case as Apr-19 could play out.
• Look out for resistances at RM3.39 (R1) and RM3.58 (R2), while downside supports can be found at RM3.20 (S1) and RM3.08 (S2).

KAREX (Not Rated)

• KAREX rose 3.5 sen (+6.09%) to end at RM0.610.
• Chart-wise, yesterday’s candlestick gapped up after a Doji candlestick, the previous trading day, signifying strong buying momentum. We believe the share could soon test its YTD high of RM0.665.
• Its 20- and 50-day SMAs are in a “Golden-Cross” position and coupled with positive upticks from key momentum indicators, these lead us to believe that the rally could continue.
• Expect the share to test resistance levels at RM0.650 (R1) and potentially higher at RM0.780 (R2).
• Conversely, key support level can be identified at RM0.500 (S1) and RM0.375 (S2).

Source: Kenanga Research - 16 Jul 2019