On Our Technical Watch
26 May 2017
By Lawrence Yeo Eng Chien l [email protected] Figure 1: Daily Charting – FBMKLCI
Source: Bloomberg, Kenanga Research Basic Data
52-week High 1,787.54 (in Million)
52-week Low 1,611.88 KLCI Vol 175.44
Current Level 1,773.96 Bursa Vol 2945.04 Intraday High 1,782.54 Bursa Val 3175.00 Intraday Low 1,773.22
Technical Ratings
Resistance 2 1,800 MACD Neutral
Resistance 1 1,784 RSI (14) Neutral Current Level 1,773.96 Stochastic Neutral
Support 1 1,760
Support 2 1,743 Outlook Neutral
FBMKLCI rose on selective buying on blue chips
The FBMKLCI climbed 2.95 points (0.2%) to close at 1,773.96 yesterday underpinned by gains in selective blue-chip counters while sentiment were also lifted by the firmer Ringgit against the greenback at (RM4.2790/USD). Looking at the daily chart, the FBMKLCI is looking to test its immediate resistance level fo 1,784 (R1). While daily RSI and Stochastic had shown signs of uptick in reflection of the pick up in buying interest, the immediate trend of the underlying index is still tepid at this juncture given that the MACD is still depicting a flattish picture. From here, we continue to view that the FBMKLCI will end the week on a flattish note within 1,760-1,784. Overhead levels are capped at 1,784 (R1) and 1,800 (R2), while support levels are tied at 1,760 (S1)/1,743 (S2).
Firm earnings from retailers lift Wall Street to new highs
The S&P500 and Nasdaq managed to notch a new record high level underpinned by stronger earnings reported by retailers.
The DJIA also followed suit on the rise by inching up 70.53 points (0.34%) to close at 21,082.95. Looking at the DJIA’s chart, the underlying index is now on course to test its immediate resistance level of 21,169 (R1). The primary trend is looking positive at this juncture as supported by all its key moving averages and up trending momentum indicators, albeit the Stochastic indicator already in its overbought threshold. From here, a decisive breakout above the R1 level would see the next resistance capped at 21,500 (R2). Meanwhile, reluctance to go beyond the R1 level would see the DJIA caught in a range bound trend, where supports are found at 21,000 (S2)/20,915 (S2).
Daily technical highlights - (CCM, PUC)
• CCM (Not Rated). CCM’s share price ended a choppy day up 6 sen (3.8%) at RM1.62 on high volume of 2.0m shares. The company had earlier on Tuesday announced its 1Q17 results, which showed that revenue jumped 40.1% YoY while NP came in at RM8.2m compared to a net loss in 1Q16. Overall, CCM has been on a bullish trend since January. Although the share price entered into a two-month period of sideways trade, the share price finally broke out yesterday and now trades at a five-year high. With momentum indicators such as the MACD and RSI sporting bullish conditions, expect bias to be on the upside towards immediate resistance levels RM1.72 (R1) and RM1.82 (R2). Any weakness towards RM1.55 (S1) can be viewed as a buying opportunity while a break below RM1.46 (S2) would be highly negative.
• PUC (Not Rated). PUC’s share price gained for a third-straight day with a 0.5 sen (3.3%) climb yesterday to RM0.155. The share price has been on a positive trend since the start of the year, having broken out at RM0.07 and subsequently rallying to as high as RM0.175 barely three months later (March). Although the share price had since consolidated back to RM0.13 recently, this week’s gains signal yet another breakout, which brings us to believe that PUC is poised for an uptrend resumption. From here, expect a retest of March’s high of RM0.175 (R1), before a possible move to RM0.19 (R2) next.
Downside support levels are RM0.13 (S1), failing which further support is located at RM0.12 (S2).
On Our Technical Watch
26 May 2017
Figure 2: Daily Charting – Dow Jones Industrial Average
Source: Bloomberg, Kenanga Research
Figure 3: Daily Charting – Chemical Company of Malaysia Berhad (Not Rated)
About the stock:
Shariah Compliant : Yes
Name : Chemical Company
of Malaysia Berhad
Bursa Code : CCM
CAT Code : 7148
Market Cap : 650.0 52 Week High/Low : 2.43/1.9 3-m Avg. Daily Vol. : 46,567.21 Free Float (%) : 19.82%
Beta vs. KLCI : 0.6
Key Support & Resistance Level
Resistance : RM1.72 (R1) RM1.82 (R2) Support : RM1.55 (S1) RM1.46 (S2) Outlook : Bullish
What does the indicator says
MACD : Neutral-Bullish
RSI : Bullish
Stochastic : Overbought
Trend : Bullish
What should you do
Current Share Price : RM1.62 Technical Target : - Technical Cut-loss : -
Fundamental Call
Kenanga : -
Consensus : -
Source: Bloomberg, Kenanga Research
On Our Technical Watch
26 May 2017
Figure 4: Daily Charting – PUC Founder (MSC) Bhd (Not Rated)
About the stock:
Shariah Compliant : Yes
Name : PUC Founder
(MSC) Bhd Bursa Code : PUC
CAT Code : 0007
Market Cap : 181.5 52 Week High/Low : 0.18/0.06 3-m Avg. Daily Vol. : 20,675,170.00 Free Float (%) : 55.47%
Beta vs. KLCI : 1.8
Key Support & Resistance Level
Resistance : RM0.175 (R1) RM0.19 (R2) Support : RM0.15 (S1) RM0.12 (S2) Outlook : Bullish
What does the indicator says
MACD : Bullish
RSI : Bullish
Stochastic : Overbought
Trend : Bullish
What should you do
Current Share Price : RM0.155 Technical Target : - Technical Cut-loss : -
Fundamental Call
Kenanga : -
Consensus : -
Source: Bloomberg, Kenanga Research
This section is intentionally left blank.
On Our Technical Watch
26 May 2017
Unrealised Positions (May 2017)
No CATS
Stock Name Issued Date
(ID)
Price
@ ID
Target Price
Stop- Loss
Upside Potential
Downside Risk
Reward/
Risk Ratio Last Price
Dividend Received since ID
Gain/ Gain/
Rating Comment/ Action Code
Loss (incl.
Div.) Loss
RM RM (%) (%) (x) RM RM RM (%)
1 8869 PRESS METAL BERHAD 13-Oct-16 1.557 2.730 2.280 75.34% 46.44% -1.6 2.660 0.025 1.13 72.45% BUY
TP upgraded to RM2.73, SL revised to RM2.28
2 9334 KESM INDUSTRIES BHD 11-Nov-16 9.150 11.340 8.480 23.93% -7.32% 3.3 13.640 0.030 4.52 49.40% BUY *
3 7071 O&C RESOURCES BHD 16-Mar-17 0.620 0.730 0.570 17.74% -8.06% 2.2 0.625 - 0.01 0.81% BUY -
4 7097 TA WIN HOLDINGS BHD 16-Mar-17 0.625 0.795 0.545 27.20% -12.80% 2.1 0.860 - 0.24 37.60% BUY -
5 1171 MALAYSIA BUILDING SOCIETY 21-Mar-17 1.240 1.460 1.100 17.74% -11.29% 1.6 1.300 - 0.06 4.84% BUY -
6 0089 TEX CYCLE TECHNOLOGY 21-Apr-17 1.270 1.460 1.150 14.96% -9.45% 1.6 1.250 - -0.02 -1.57% BUY -
7 0186 PERAK TRANSIT BHD 16-May-17 0.285 0.335 0.255 17.54% -10.53% 1.7 0.285 - 0.00 0.00% BUY -
8 7231 WELLCALL HOLDINGS BHD 25-May-17 2.290 2.540 2.220 10.92% -3.06% 3.6 2.370 - 0.08 3.49% BUY
Simple Average 27.78% -1.86% 1.54 23.36%
*Tracker does not include Non-Rated positions
Realised Positions (May 2017)
No
CATS
Stock Name Issued
Date
Buy Price
Intraday price since Buy Date
Price change since
Buy Date (%) Sell Date Sell Price
Dividend Received since ID
Gain/ Gain/
Rating Comment/ Action
Code
Loss (incl.
Div.) Loss
(H) (L) (H) (L) RM RM RM (%)
1 7204 D&O GREEN TECHNOLOGIES BHD 17-Mar-17 0.660 0.735 0.615 11.36% -6.82% 3-May-17 0.650 - -0.01 -1.52% Take Profit Technical picture turned invalid 2 5054 TRC SYNERGY BHD 28-Mar-17 0.575 0.640 0.560 11.30% -2.61% 4-May-17 0.650 - 0.08 13.04% Take Profit -
3 7579 AWC BERHAD 28-Feb-17 0.985 1.130 0.970 14.72% -1.52% 11-May-17 1.130 - 0.15 14.72% Take Profit -
Simple Average 12.46% -3.65% 8.75%
On Our Technical Watch
26 May 2017
Basic Technical Terms:
Reversal Candlesticks Patterns Description Doji
Dragonfly Doji (Bullish) Gravestone Doji (Bearish)
Dojis form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary, and the resulting candlestick looks like, either, a cross, inverted cross, or plus sign. Doji convey a sense of indecision or tug-of-war between buyers and sellers.
Engulfing Pattern
A reversal pattern that can be bearish or bullish, depending upon whether it appears at the end of an uptrend (bearish engulfing pattern) or a downtrend (bullish engulfing pattern). The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's price action.
Hammer (Bullish) Shooting Star (Bearish)
Hammer candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. This appears in a downtrend.
In contrast, the Shooting Star pattern appears in an uptrend. It opens higher, trades much higher, then closes near its open. It looks just like the Inverted Hammer except that it is bearish.
Inverted Hammer (Bullish) Hanging Man (Bearish)
The Inverted Hammer is a single-day bullish reversal pattern. In a downtrend, the open is lower, then it trades higher, but closes near its open price, therefore looking like an inverted lollipop.
Hanging Man candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low.
Harami Harami Cross
The Harami is a two-day pattern that can be bullish or bearish. It has a small body day completely contained within the range of the previous body, and is the opposite colour.
The Harami Cross is similar to the Harami. The difference is that the last day is a Doji.
Marubozu
A Marubozu candlestick has no shadow extending from the body at either the open, the close or at both.
Morning Doji Star (Bullish) Evening Doji Star (Bearish)
A Morning Doji Star (Evening Doji Star) is a three-day candlestick bullish (bearish) reversal pattern - a long-bodied black (white) candle extending the current downtrend, a short middle candle that gapped down (up) on the open, and a long-bodied white candle that gapped up (down) on the open and closed above (below) the midpoint of the body of the first day.
Spinning Top
Spinning Tops are candlestick lines that have small bodies with upper and lower shadows that exceed the length of the body. They are similar to the Doji candlesticks, and signal indecision.
Source: Various
Common Chart Patterns
Reversal Patterns
Inverted Head & Shoulders (Bullish)
Head & Shoulders (Bearish) Wedge Reversal (Bullish/
Bearish)
Double Top (Bearish) Double Bottom (Bullish)
Continuation Patterns Symmetrical Triangle (Bullish/ Bearish)
Ascending Triangle (Bullish)
Channels (Bullish/ Bearish) Flags (Bullish/ Bearish) Pennant (Bullish/ Bearish)
Source: Various
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