· PMETAL (Trading Buy, TP @ RM2.45). PMETAL recently garnered investors’ interest to achieve 11.9% MoM gain, while it underwent a consolidation phase after closing at a two-month high of RM2.30. The share price has since formed a ‘Symmetrical Triangle’ chart pattern whereas key technical indicators are suggesting that the stock could potentially consolidate further, underpinned by the lack of trading volume as well as the unexciting position of the RSI and Stochastic. Nevertheless, this consolidation could offer a good entry opportunity for investors looking to enter the stock. Should the share price garner enough interest to stage a technical breakout from the ‘Symmetrical Triangle’ chart pattern, the stock could possibly rally towards of RM2.45 (R2).

· SYSTECH (Not Rated). SYSTECH recently broke out from its resistance-turned-support level of RM0.26 (S1) as well as its multi-month downtrend resistance level on the back of above average trading volume. Key momentum indicators are suggesting that the share price is gaining momentum, as both the RSI and Stochastic are hooking upwards. Should follow through buying interest continue, we believe the share price could look to retest its immediate resistance level of RM0.29. Despite that, we do not discount that the uptrend could be capped at RM0.29 as we observe that both RSI and Stochastic are nearing their overbought threshold. 

Source: Kenanga Research - 16 Oct 2015