By Lawrence Yeo / lawrenceyeo@kenanga.com.my; Steven Chan / steven.chan@kenanga.com.my; Muhammad Afif Bin Zulkaplly / muhammad.afif@kenanga.com.my Figure 1: Daily Charting FBMKLCI Basic Data 52-week High 1,796.75 (in Million) 52-week Low 1,614.11 KLCI Vol 90.17 Current Level 1,741.47 Bursa Vol 2728.7 Intraday High 1,744.86 Bursa Val 1951.68 Intraday Low 1,741.38 Technical Ratings Resistance 2 1,783 MACD Neutral-Bearish Resistance 1 1,765 RSI (14) Neutral Current Level 1,741.47 Stochastic Oversold Support 1 1,729 Support 2 1,713 Outlook Neutral Bearish Lack of catalyst, investors indecisive in market movement On Monday, Asian markets finished mostly higher led by the Japanese market after Prime Minister Shinzo Abe s ruling party won the general election heralding that the loose monetary policy will likely continue. Locally, the FBMKLCI ended with marginal gain of 0.82pts (+0.05%) to close at 1,741.47. Meanwhile, the broader market sentiment was negative as 453 losers outpaced 434 losers, while 365 shares traded unchanged. Chart-wise, the index climbed up by 4pts during the early trading session but later pared most of its gains. Consequently, a Gravestone Doji candle was formed, reflecting indecision in the market direction. As yet, key indicators showed no sign of recovery and are mostly in a negative state. The overall technical picture deteriorated after it broke down below the support level of 1,750, indicating that the outlook is starting to get bearish. On further weakness, support levels can be found at 1,729 (S1) and 1,713 (S2). Conversely, the resistance levels to look out for now are 1,765 (R1) and 1,783 (R2). Wall Street is due for a pullback Overnight on Wall Street, Wall Street retreated on profit-taking activity after a series of record closing last week. The DJIA shed 54.56pts (-0.23%), closing at 23,273.96. The index drifted gradually into the red throughout the day ending at intraday low. From the momentum indicators, we see the current pullback as a necessary pause given the strong run these past two months. We would not rule out further near-term consolidation as the indicators, i.e. RSI and Stochastic remain in the overbought territory. However, with the bullish primary uptrend remaining intact, any weakness is likely to be shallow and temporary. Likely support levels are located at 22,856 (S1) and 22,597 (S2) while overhead resistance levels are 23,275 (R1) and 23,533 (R2). Daily technical highlights - (VERSATL, COMFORT) VERSATL (Not Rated). VERSATL saw its share price surging 6.0 sen (7.5%) yesterday to finish at the day s high of RM0.855. Trading volume rose to 6.5m shares, five-fold the daily average. Of note, VERSATL has now broken out of a Double Bottom chart pattern, which signalled that the share price is poised for a major reversal having endured a steep downtrend earlier in July-August. Furthermore, the MACD is also showing signs of bullish convergence to reflect this shift in sentiment. From here, we see the potential for a swift move to RM0.91 (R1) and the measurement objective of RM0.97 (R2) further up. Any return to the RM0.82 (S1) neckline can be viewed as a buying opportunity, although a move below the 20- and 50-day SMAs at RM0.75 (S2) would be highly negative. COMFORT (Not Rated). COMFORT rallied an astonishing 12.5 sen (12.8%) yesterday, closing at RM1.10. This was accompanied by exceptionally high trading volumes of 36.6m shares more than 7x its 20-day average of 4.7m shares. More importantly, yesterday s move could potentially signal a continuation of a prior uptrend, which lasted from May to Aug, after a 2-month long period of sideways consolidation. Likewise, with key SMAs forming a golden-cross, coupled with upticks in key SMAs, we reckon that the balance of evidence favours a continued move upwards at this juncture. From here, expect some overhead resistances at RM1.15 (R1) and RM1.19 (R2), while downside supports can be identified at RM0.97 (S1) and RM0.91 (S2). PP7004/02/2013(031762) Page 1 of 5
Figure 2: Daily Charting Dow Jones Industrial Average Figure 3: Daily Charting Versatile Creative Bhd (Not Rated) About the stock: Shariah Compliant : Yes Name : Versatile Creative Bhd Bursa Code : VERSATL CAT Code : 4995 Market Cap : 100.3 52 Week High/Low : 1.68/0.67 3-m Avg. Daily Vol. : 1,272,818.00 Free Float (%) : 84.27% Beta vs. KLCI : -0.2 Key Support & Resistance Level Resistance : RM0.91 (R1) RM0.97 (R2) Support : RM0.82 (S1) RM0.75 (S2) Outlook : Bullish What does the indicator says MACD : Bullish RSI : Bullish Stochastic : Overbought Trend : Bullish reversal What should you do Current Share : RM0.855 Technical Target : - Technical Cut-loss : - Fundamental Call Kenanga : - Consensus : - PP7004/02/2013(031762) Page 2 of 5
Figure 4: Daily Charting Comfort Gloves Berhad (Not Rated) About the stock: Shariah Compliant : Yes Name : Comfort Gloves Berhad Bursa Code : COMFORT CAT Code : 2127 Market Cap : 614.7 52 Week High/Low : 1.12/0.65 3-m Avg. Daily Vol. : 5,461,946.00 Free Float (%) : 62.89% Beta vs. KLCI : 0.0 Key Support & Resistance Level Resistance : RM1.15 (R1) RM1.19 (R2) Support : RM0.97 (S1) RM0.91 (S2) Outlook : Bullish What does the indicator says MACD : Bullish RSI : Bullish Stochastic : Overbought Trend : Bullish-Neutral What should you do Current Share : RM1.10 Technical Target : - Technical Cut-loss : - Fundamental Call Kenanga : - Consensus : RM1.28 This section is intentionally left blank. PP7004/02/2013(031762) Page 3 of 5
Unrealised Positions (Oct 2017) No CATS Code Stock Name Issued Date (ID) @ ID Dividend Gain/ Gain/ Target Stop- Upside Downside Reward/ Last Received Loss Potential Risk Risk Ratio Loss (incl. since ID Div.) Loss RM RM (%) (%) (x) RM RM RM (%) Rating Comment/ Action 1 7097 TA WIN HOLDINGS BHD 16-Mar-17 0.625 1.540 1.100 146.40% 76.00% -1.9 1.480-0.86 136.80% BUY Upgraded TP/SL (8-Aug) 2 0089 TEX CYCLE TECHNOLOGY 21-Apr-17 1.270 1.460 1.150 14.96% -9.45% 1.6 1.280 0.010 0.02 1.57% BUY 3 0186 PERAK TRANSIT BHD 16-May-17 0.259 0.304 0.232 17.54% -10.53% 1.7 0.310 0.003 0.05 20.66% BUY 4 7231 WELLCALL HOLDINGS BHD 25-May-17 1.527 2.540 2.220 66.34% 45.38% -1.5 1.420 0.016-0.09-5.99% BUY 5 4731 SCIENTEX BHD 6-Sep-17 8.910 9.640 8.440 8.19% -5.27% 1.6 8.690 - -0.22-2.47% BUY 6 3042 PETRON MALAYSIA REFINING & M 19-Sep-17 10.300 11.250 9.820 9.22% -4.66% 2.0 11.620-1.32 12.82% BUY 7 5125 PANTECH GROUP HOLDINGS BHD 28-Sep-17 0.670 0.765 0.645 14.18% -0.037 3.8 0.700-0.03 4.48% BUY 8 7100 UCHI TECHNOLOGIES BHD 4-Oct-17 2.730 3.420 2.510 25.27% -0.081 3.1 2.900-0.17 6.23% BUY 9 0097 VITROX CORP BHD 13-Oct-17 4.860 5.930 4.370 22.02% -0.101 2.2 5.120-0.26 5.35% BUY Simple Average 36.01% 7.73% 1.39 19.94% *Tracker does not include Non-Rated positions Realised Positions (Oct 2017) CATS No Stock Name Code Issued Date Buy Intraday price since Buy Date change since Buy Date (%) Sell Date Sell Dividend Received since ID Gain/ Loss (incl. Div.) Gain/ Loss Rating Comment/ Action (H) (L) (H) (L) RM RM RM (%) Simple Average 0.00% 0.00% 0.00% PP7004/02/2013(031762) Page 4 of 5
Basic Technical Terms: Reversal Candlesticks Patterns Description Doji Dragonfly Doji (Bullish) Gravestone Doji (Bearish) Engulfing Pattern Hammer (Bullish) Shooting Star (Bearish) Inverted Hammer (Bullish) Hanging Man (Bearish) Harami Harami Cross 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. 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 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. 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. 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) Spinning Top 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 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 This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may read this document. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees. Kenanga Investment Bank Berhad accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. Kenanga Investment Bank Berhad and its associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. Published and printed by: KENANGA INVESTMENT BANK BERHAD (15678-H) Level 12, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia Telephone: (603) 2172 0880 Website: www.kenanga.com.my Email: research@kenanga.com.my Chan Ken Yew Head of Research PP7004/02/2013(031762) Page 5 of 5