CGSCIMB in the recent Malaysia Retail Research pointed out Kelington Group and Tex Cycle Technology Malaysia as two viable stocks for long term investment.
“Kelington Group broke out of its 1.5-year cup and handle pattern a couple of days ago. With prices trading above all the exponential moving averages, we think that the longer term uptrend may have resumed following the said breakout,” said CGSCIMB.
The higher high and higher low sequence from the RM1.31 low is supportive of the current breakout move. The moving average convergence divergence has just moved back into positive territory while the relative strength index has been strengthening since late last month.
“Both indicators are supportive of the current breakout move. We think that aggressive traders may want to go long now or accumulate on a pullback, with a stop-loss set at RM1.36,” said CGSCIMB.
This breakout move may see prices climb towards the 52-week high of RM1.63 next. The following resistances are at RM1.73 and RM1.80. Tex Cycle Technology Malaysia stocks jumped and closed at its 2-month high yesterday with a white bullish candle. Prices also push above the resistance of its 4-month consolidation triangle yesterday on the back of higher trading volume.
With the said breakout, the stock may be on the verge of a new short-term uptrend. Both the moving average convergence divergence and relative strength index have hooked up further, indicating that the buying momentum is picking up.
“We think that aggressive traders may want to go long now or accumulate on a pullback, with a stop-loss set at RM0.74,” said CGSCIMB.
Follow-through buying may lift prices to test its 52-week high at RM0.875 next.
