Ariantec's may trade lower after the decline yesterday. The stock is on a strong rally and broke many resistance levels along the way. It even managed to close above RM0.25 on Wednesday, after the failed tests early in the week. However, the trend may take a turn yesterday as sellers have emerged. It formed a 'Bearish Engulfing' candle, covering the  body of the prior 3 candles. The close below the prior 2-day low  also  adds to the negative bias, increasing the potency of the false breakout of RM0.25. Thus, a correction is likely to follow, and aggressive traders may exit on rebound towards RM0.25.  A conservative trader may wait until  the stock closes below  Monday's low of RM0.225 before liquidating.  Support is expected at RM0.20, RM0.175 and then RM0.135, where a close below RM0.135 may signal the end of the two-month rally.  The weak bias will be neutralized should the stock close above RM0.25 and this should lead to a continuation of the rally. If so, look for the stock to test the psychological level of RM0.30.

Keladi's share price  may  trade higher  if it violates the psychological level.  The stock has been rallying  firmly, together with the broad market  since  hitting  the low of Sept 2011. Nonetheless, it spent the last 3 months consolidating the trend. The uptrend is still apparent, from the series of higher lows in the past 7 months.  The latest low should mark a strong support and form a good base for the next leg up. However, a continuation of  the uptrend is only confirmed on a sustained close above RM0.20. That will see the stock closing the highest in four years. Purchases can be made if  this happens with a stop loss on close below RM0.19.  A conservative trade may wait until it closes above the past year intraday-high of RM0.21 before entering.  The price target is RM0.25, based on the 3-year consolidation width, and a strong move may even see the test of psychological RM0.30. A close below RM0.19 will invalidate the trade, but do keep a close watch on the stock, as an attempt to test the resistance level could happen again in the future.

Source: OSK188