PUNCAK (Not Rated). There was a sudden surge in trading volume among water players probably due to an article by The Edge that highlighted speculations over PUNCAK’s next move after it disposed its water assets and restructured its oil & gas division. PUNCAK surged 13.0 sen (11.0%) to stage a breakout from its downtrend resistance-turned-support trend line to settle at RM1.31 yesterday. Technically speaking, the bullish convergence of the MACD and strong hook up seen in the RSI are suggesting a bullish outlook ahead, indicating healthy buying interest on the stock. From here, follow through buying interest could lead the share price to trend further up towards RM1.40 (R1) and possibly RM1.60 (R2) next. Immediate support is seen at RM1.25 (S1) and RM1.02 (S2) next.

KPS (Not Rated). KPS has been on a downtrending trajectory since reaching a high of RM1.42 back in October 2015. The stock has recently garnered investors interest alongside other water players, surging 8.0 sen (8.3%) to close at RM1.05 yesterday. From a technical standpoint, the share price has broken out from its multi-month downtrend resistance trend line. All key momentum indicators are lending a hand on the bullish-bias outlook, with the MACD staging a bullish crossover on the back of strong uptick seen in both RSI and Stochastic, from their respective oversold territory. This could pose as a potential short-term trading opportunity for investors, where we expect the hype for water players could rally the share price towards RM1.05 (R1) and possibly RM1.18 (R2) next. Note that immediate support is seen at RM1.00 (S1) followed by RM0.955 (S2) next.

Source: Kenanga Research - 17 Mar 2016