PETRONM (Stopped Out @ RM6.47). Recall that we had previously issued a Trading Buy call on PETRONM back in 23-February, after the share price staged a technical breakout from its ‘Ascending Triangle’ chart pattern then. Unfortunately, the shares have undergone a tremendous sell-down (-24.8% since our issue date to RM5.35 yesterday) after they reported a rather disappointing earnings report card. All key momentum indicators (MACD, Stochastic and RSI) are trending south strongly to lend a hand on the bearish technical picture. As the share price has met our conservative stop-loss level of RM6.47, we are forced to stop out from the stock. Meanwhile, interested investors who are looking to accumulate on weakness should be aware of catching the falling knife at this juncture. Instead, they could look to enter at a more compelling level near the RM4.50-RM4.56 (S2) level. We strongly advise investors to look for a convincing technical rebound from the aforesaid support level before entering the stock.

EKIB (Not Rated). On a more positive note, geo-technical engineering company EKIB reached our RM1.37 technical target price yesterday to return a meaty 20.0 sen (17.1%) gain over a two-day period. Recall that last Friday (see report dated 26 Feb), we highlighted EKIB at RM1.17 when the share price broke out of a “Bullish Pennant” formation. In yesterday’s trade, EKIB rallied to a high of RM1.39, before ending the day almost flat at RM1.27 (+1.0 sen or 0.8%) on profit taking activities. The daily chart now depicts a “Gravestone Doji” candlestick – typically a signal that the bullish run is about to reverse. Hence, traders who have yet to take profit should consider taking some chips off the table for now. Overhead resistance levels are now at RM1.37/1.39 (R1) and RM1.43 (R2) while supports are pegged at RM1.20 (S1) and RM1.10 (S2). 

Source: Kenanga Research - 1 Mar 2016