By the Kenanga Research Team l research@kenanga.com.my KLCI BURSA 23-Jul RSI (13D) SMAVG (21D) KLCI 1,871.8 41.1 1,883.4 FTSE EMAS 13,073.9 49.8 13,101.0 FTSE Smallcap 18,834.7 84.8 18,352.8 FTSE MESDAQ 7,054.8 72.8 6,805.2 KLCI Futures Jul-14 1,867.0 36.5 1,884.3 Aug-14 1,864.5 45.5 1,880.9 CPO 2,255.0 26.2 2,361.1 INDICES 23-Jul RSI (13D) SMAVG (21D) Dow Jones 17,086.6 57.3 16,987.6 NASDAQ 4,473.7 61.7 4,423.7 FTSE-100 6,798.2 53.7 6,764.0 Nikkei 225 15,328.6 54.7 15,301.0 SHCOMP 2,078.5 60.8 2,056.6 HSI 23,971.9 70.5 23,414.1 STI 3,340.7 72.7 3,287.3 KOSPI 2,028.3 62.2 2,009.2 TWSE Closed Closed 9,457.6 JCI 5,093.2 61.1 4,991.8 SET 1,541.6 70.7 1,507.4 KLCI COMPONENT STOCKS 23-Jul RSI (13D) SMAV (21D) AMBANK 7.08 35.0 7.14 ASTRO 3.29 43.7 3.38 AXIATA 6.89 46.7 6.92 BAT 68.54 60.0 67.34 CIMB 6.92 30.9 7.15 DIGI 5.59 39.2 5.67 FGV 4.11 42.5 4.15 GENTING 9.87 49.8 9.88 GENM 4.29 60.6 4.21 HlBANK 14.10 56.2 14.00 HLFG 17.50 67.3 16.63 IHH 4.70 65.9 4.57 IOICORP 5.00 36.2 5.15 KLCC 6.36 44.9 6.45 KLK 23.70 29.7 24.12 MAYBANK 9.91 50.8 9.90 MAXIS 6.74 50.8 6.73 MISC 6.63 55.2 6.58 PCHEM 6.71 41.2 6.75 PETDAG 19.34 11.8 22.46 PETGAS 23.50 35.3 24.13 PPB 14.18 28.5 14.81 PBBANK 19.98 48.4 19.96 RHBCAP 9.00 60.1 8.83 SKPETRO 4.40 54.3 4.39 SIME 9.64 53.4 9.65 TM 6.29 48.4 6.33 TENAGA 12.42 60.0 12.37 UMW 11.62 72.2 11.31 YTL 1.57 43.7 1.60 Market Snapshot US Market: Dow Jones Industrial Average (DJIA) How was the market? The DJIA was being dragged down by Boeing despite reporting better than expected earnings. Meanwhile, the geopolitical tension in Ukraine and Gaza has kept investors on a conservative posture in the broader market. At the closing bell, the DJIA dipped 26.91 points or 0.16% to settle at 17,086.63. Top 3 Index Laggards: Boeing Co. (-3.03%), Caterpillar Inc. (-1.68%), United Technologies Corp. (-1.13%). What is the chart saying? The DJIA continued to trade within a tight range yesterday. However, this is less of our worry as the primary trend of the key index remained up and bullish. All key indicators (MACD, Stochastic and RSI) remained flattish, suggesting that the short term sideway trading trend could continue. We reiterate our cautiously optimistic view that the DJIA could trend higher towards the 17,500 mark so long as the US Fed Reserve keeps the interest rate accommodative. Immediate resistance is capped at 17,500 while strong buying support is located at 17,000-level. Cautiously Optimistic Key Resistance level 17,500 (R1) 17,700 (R2) 18,000 (R3) Key Support level 17,000 (S1) 16,824 (S2) 16,600 (S3) Malaysia Market: FBMKLCI Index How was the market? The local benchmark ended the day flattish amid selective buying in several heavyweight counters. Meanwhile, investors continue their rotational interest in the small and mid-cap counters as they are still digesting the geopolitical issues in Ukraine and Middle East. At the closing bell, the FBMKLCI climbed 0.47 points or 0.03% to close at 1871.83. Top 3 Index Movers: FGV (+0.66 points), MISC (+0.57 points), ASTRO (-0.49 points) What is the chart saying? Chart-wise, the FBMKLCI has formed a Spinning Top candlestick pattern, suggesting that investors were indecisive on the direction of the index. Meanwhile, readings from key indicators are relatively flattish suggesting a possible sideway trading pattern ahead. We reiterate that the current downtrend is expected to be limited from here as investors are taking a sideline approach, digesting the recent negative sentiment of the MH17 incident. Immediate buying support is expected to emerge at the 1,860-1,855 level. Sideways range-bound Key Resistance level 1,892 (R1) 1,900 (R2) 1,925 (R3) Key Support level 1,860 (S1) 1,843 (S2) 1,826 (S3) Highlights / Stock Picks of the Day Muda Holding Bhd (MUDA) Take Profit MUDA s share price increased 8 sen (3.43%) yesterday on higher trading volume after a strong rally since Jan-14. Recall that we placed a Trading Buy call on the stock at RM1.90 on 24th-April due to strong earnings which caused a breakout of a Bullish Pennant chart pattern, hinting that the share was poised to enter into another round of rally. The current technical picture does not display signs of momentum waning as all 3 SMA s are on upward trajectory. RSI and Stochastic are also pointing upwards, but are in overbought region, indicating further gains could be limited. MUDA s share price has rallied by 26.8% since our last call. As the share price has hit our target price of RM2.43 during the day, we are placing a Take Profit call on this stock. Bullish Key Resistance level RM2.51(R1) RM2.73 (R2) RM2.90 (R3) Key Support level RM2.17 (S1) RM2.08 (S2) RM1.93 (S3) Strategy Take Profit Current Price RM2.41 SMRT Holdings Bhd (SMRT) Trading Buy SMRT gained 6.5sen (9.15%) to close at RM0.775 yesterday with a spike in trading volume seen. From a technical perspective, a breakout from its Ascending Triangle chart pattern is seen at RM0.74 level. Moreover, MACD is also seen to be trending up looking poised for a positive crossover the Signal Line, signaling strong buying pressure in the stock. Momentum indicators (RSI and Stochastic) have also hooked upwards suggesting buying momentum is piling up. We are placing a Trading Buy call on this stock with a target of RM0.92 (3 bids below our measurement objective of RM0.94) while employing a strict stop-loss at RM0.73 (3 bids below the RM0.74 level). Bullish Key Resistance level RM0.87 (R1) RM0.95 (R2) RM1.01 (R3) Key Support level RM0.74 (S1) RM0.68 (S2) RM0.61 (S3) Strategy Trading Buy Current Price RM0.77 PP7004/02/2013(031762) Page 1 of 6
Daily Charting Dow Jones Industrial Average (DJIA) What is the chart saying? The DJIA continued to trade within a tight range yesterday. But, this is less of our worry as the primary trend of the key index remained up and bullish. All key indicators (MACD, Stochastic and RSI) remained flattish, suggesting that the short term sideway trading trend could continue. We reiterate our cautiously optimistic view that the DJIA could trend higher towards the 17,500 mark so long as the US Fed Reserve keeps the interest rate accommodative. Immediate resistance is capped at 17,500 while strong buying support is located at 17,000-level. Technical Ratings Resistance 2 17,700 MACD Bearish Resistance 1 17,500 Stochastic Neutral Current Level 17,086.63 RSI Neutral Support 1 17,000 Support 2 16,824 Cautiously Optimistic Daily Charting FBM KLCI index What is the chart saying: Chart-wise, the FBMKLCI has formed a Spinning Top candlestick pattern, suggesting that investors were indecisive on the direction of the index. Meanwhile, readings from key indicators are relatively flattish suggesting a possible sideway trading pattern ahead. We reiterate that the current downtrend is expected to be limited from here as investors are taking a sideline approach, digesting the recent negative sentiment of the MH17 incident. Immediate buying support is expected to emerge at the 1,860-1,855 level. Technical Ratings Resistance 2 1900 MACD Bearish Resistance 1 1892 Stochastic Neutral Current Level 1873.83 RSI (14) Neutral Support 1 1860 Support 2 1843 Sideways rangebound PP7004/02/2013(031762) Page 2 of 6
Daily Charting Muda Holdings Bhd About the stock: Name : Muda Holdings Bhd Bursa Code : MUDA CAT Code : 7076 Market Cap : 735.2 52 Week High/Low : 2.43/0.74 3-m Avg. Daily Vol. : 390,055.6 Free Float (%) : 39.8% Beta vs. KLCI : 0.6 MUDA s share price increased 8 sen (3.43%) yesterday on higher trading volume after a strong rally since Jan-14. Recall that we placed a Trading Buy call on the stock at RM1.90 on 24th-April due to strong earnings which caused a breakout of a Bullish Pennant chart pattern, hinting that the share was poised to enter into another round of rally. The current technical picture does not display signs of momentum waning as all 3 SMA s are on upward trajectory. RSI and Stochastic are also pointing upwards, but are in overbought region, indicating further gains may be limited. MUDA s share price has rallied by 26.8% since our last call. As the share price has hit our target price of RM2.43 during the day, we are placing a Take Profit call on this stock. Key Support & Resistance level Resistance : RM2.51(R1) RM2.73 (R2) RM2.90 (R3) Support : RM2.17 (S1) RM2.08 (S2) RM1.93 (S3) : Bullish What does indicator says: MACD : Bullish Stochastic : Overbought RSI : Bullish Trend : Bullish What should you do: Strategy : Take Profit Current Share Price : RM2.41 Fundamental Call KNK : N.A. Consensus : N.A PP7004/02/2013(031762) Page 3 of 6
Daily Charting SMRT Holdings Bhd About the stock: Name : SMRT Holdings Bhd Bursa Code : SMRT CAT Code : 0117 Market Cap : 171.9 52 Week High/Low : 0.81/0.20 3-m Avg. Daily Vol. : 4,123,692.0 Free Float (%) : 54.8% Beta vs. KLCI : 1.8 SMRT gained 6.5sen (9.15%) to close at RM0.775 yesterday with a spike in trading volume seen. From a technical perspective, a breakout from its Ascending Triangle chart pattern is seen at RM0.74 level. Moreover, MACD is also seen to be trending up looking poised for a positive crossover the Signal Line, signaling strong buying pressure in the stock. Momentum indicators (RSI and Stochastic) have also hooked upwards suggesting buying momentum is piling up. We are placing a Trading Buy call on this stock with a target of RM0.92 (3 bids below our measurement objective of RM0.94) while employing a strict stop-loss at RM0.73 (3 bids below the RM0.74 level). Key Support & Resistance level Resistance : RM0.87 (R1) RM0.95 (R2) RM1.01 (R3) Support : RM0.74 (S1) RM0.68 (S2) RM0.61 (S3) : Bullish What does indicator says: MACD : Bullish Stochastic : Bullish RSI : Bullish Trend : Bullish What should you do: Strategy : Trading Buy Current Share Price : RM0.77 Fundamental Call KNK : N.A. Consensus : N.A PP7004/02/2013(031762) Page 4 of 6
Unrealised Positions (July 2014) No CATS Dividend Gain/ Gain/ Issued Date Price @ Target Stop- Upside Downside Reward/ Risk Last Stock Name Received (ID) ID Price Loss Potential Risk Ratio Price Loss (incl. Code since ID Div.) Loss RM RM (%) (%) (x) RM RM RM (%) 1 0166 INARI AMERTRON BHD 19-Jun-14 3.01 3.48 2.88 15.61% -4.32% 3.6 3.31-0.30 9.97% BUY - 2 7076 CB INDUSTRIAL PRODUCT HLDG 21-Jul-14 4.61 5.62 4.39 21.91% -4.77% 4.6 4.72-0.11 2.39% BUY - 3 5703 MUHIBBAH ENGINEERING (M) BHD 23-Jul-14 3.39 4.17 3.13 23.01% -7.67% 3.0 3.31 - -0.08-2.36% BUY - 4 0117 SMRT HOLDINGS BHD 24-Jul-14 0.78 0.92 0.73 18.71% -5.81% 3.2 0.78-0.00 0.00% BUY - Rating Comment/ Action *Tracker does not include Non-Rated positions Realised Positions (July 2014) No Simple Average 19.81% -5.64% 3.61 2.50% CATS Intraday price Price change Gain/ Gain/ Issued Buy Sell Sell Dividend Received Stock Name since since Date Price Date Price since ID Loss (incl. Code Buy Date Buy Date (%) Div.) Loss (H) (L) (H) (L) RM RM RM (%) Rating Comment/ Action 1 5162 ECS ICT BHD 24-Jan-14 1.18 1.46 1.12 23.73% -5.08% 3-Jul-14 1.43 0.03 0.28 23.31% Take Profit RM1.43 TP surpassed 2 7155 SKP RESOURCES BHD 17-Jun-14 0.48 0.61 0.47 27.08% -2.08% 8-Jul-14 0.60-0.12 25.00% Take Profit RM0.60 TP met 3 0097 VITROX CORP BHD 23-Jun-14 1.98 2.70 2.23 36.36% 12.63% 9-Jul-14 2.41 0.02 0.45 22.73% Take Profit RM2.41 TP met 4 8672 KAMDAR GROUP M BHD 3-Jul-14 0.80 0.87 0.79 8.75% -1.88% 21-Jul-14 0.70 0.04-0.06-7.50% Stopped-out RM0.70 stop-loss level triggered 5 3883 MUDA HOLDINGS BERHAD 24-Apr-14 1.90 2.43 1.76 27.89% -7.37% 23-Jul-14 2.43 0.03 0.56 29.47% Take Profit RM2.43 TP met Simple Average 24.76% -0.76% 18.60% PP7004/02/2013(031762) Page 5 of 6
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) 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Telephone: (603) 2166 6822 Facsimile: (603) 2166 6823 Website: www.kenanga.com.my Chan Ken Yew Head of Research PP7004/02/2013(031762) Page 6 of 6