Stocks on radar: Thong Guan, Poh Kong

AmBank Research has highlighted two stocks with momentum based on technical charts.

Thong Guan Industries Bhd

Thong Guan Industries jumped and touched the RM4.90 resistance level. With the momentum indicator RSI pointing upwards, coupled with higher trading volume, we see that there is a possibility it will experience a technical breakout. If this happens, expect it to travel towards the short-term target prices of RM5.20 and RM5.40. The downside support is anticipated at RM4.70, whereby traders may exit on a breach to avoid the risk of a further correction 

Trading Call: Buy on breakout RM4.90 

Target: RM5.20 – RM5.40 (time frame: 2-4 weeks) 

Exit: RM4.70

Closing price: RM4.93 (on Aug 17)

Poh Kong Holdings Bhd

Poh Kong Holdings is poised to test the 96.5 sen resistance level. With higher trading volume sighted, coupled with its 21-day moving average pointing upwards, we think that the bullish momentum will soon push towards the short-term target price of RM1.03 followed by RM1.15. In this case, the downside support is marked at 87 sen, whereby traders may exit on a breach to avoid the risk of a further correction 

Trading Call: Buy on breakout 96.5 sen 

Target: RM1.03 – RM1.15 (time frame: 2-4 weeks) 

Exit: 87 sen

Closing price: 95 sen (on Aug 17)

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