Chip Eng Seng

Break out in progress- Chip Eng Seng has tested the upper band of the wedge pattern twice overthe last 4 weeks since recovering from its mid-August plunge.- Yesterday's price action saw the stock break out of the wedge pattern onthe back of strong volume, indicating that the up-move could progressfurther.- Although the stock failed to clear the 50% Fibonacci retracement levelyesterday, we anticipate that Chip Eng Seng will take out this resistancesoon. It will subsequently face resistance at the 61.8% and 78.6%Fibonacci levels at S$0.90 and S$0.99 respectively.- We are witnessing the short-term stochastic indicator rise above theoversold region, thus we expect more upside hereon.- Support set at S$0.78.