Nextnation's  shareprice  may  rise further after  yesterday's firm move.  We looked at this stock  in early January as it showed potential tomove higher. Since then, it has moved favourably and reached our first targetof RM0.145. After the price spike, it slipped into a nearly 2-month correction.Nontheless,  the stock now bears anupward bias it has retraced by less than 62% of the January rally, whichis  positive according to Fibonaccianalysis. The strong move yesterday may have confirmed the formation of ahigher bottom at RM0.09. Thus, we expect a new upleg and  believe a purchase can be made at the current price, or on pullback towards thestop loss at RM0.09. A measured move based on the January rally could see theprice reach  RM0.18,  also a Fibonacci level of the 2007-2009 pricedecline, provided that the recent high of RM0.145 is violated. A strong movecould even see the share price testing the late 2007-high of RM0.22, which  represents a clawback of  38% of the 2007-2009decline, while a close below RM0.09 will invalidate the trade and may evenspell the end of the 6-month rally.

Nova MSC's share price may go up if it can break above thelongterm  resistance level.  This stock has been trading sideways betweenRM0.055 and RM0.10  for the past 3years.  The RM0.10 level  is clearly a firm resistance  as it has held  up despite  having been  tested 3 times over the  3-year period.  However,  an upward bias was  detectedafter  the stock tested  its 3-year low last September, judging from the series of higher lows it haschalked up. The  close at  the 52-week high yesterday  broughtthe stock just below the RM0.10 resistance level, with a successful violationtoday potentially  seeing it tradinghigher. This  could  prove that  the highest volume in 5years recorded yesterday was  indeedbuying volume. A purchase can be made if this happens, with a stop loss on aclose below last week's low of RM0.07. A measured move target based on the3-year sideways move could see it  riseto  RM0.15, while a strong move may evensee the stock test the psychological RM0.20, the high in 2007. A trade may notwork out if the stop loss is triggered, after which the stock may return to itssideways trend.

Source: OSK188