LCTH (Trading Buy, TP @ RM0.785). Throughout the month of February 2016, LCTH undergone a consolidation phase after experiencing a sell-down during mid-January 2016. Yesterday, the share price garnered stronger investors' interest to stage a technical breakout from its immediate resistance-turned-support level of RM0.64 (S1) to settle at RM0.66 (+3.94%), confirming a bullish ‘inverted head and shoulder’ chart pattern. MACD has broken out from its downtrend resistance trend line to conduct a bullish convergence. Besides, the uptick in RSI and Stochastic are also supportive of the bullish outlook by indicating strong buying momentum on the stock. From here, we are placing a ‘Trading Buy’ call on the stock, expecting follow-through buying interest to rally the share price towards RM0.705 (R1) in the near-term and possibly our target objective 3 bids below RM0.80 (R2) at RM0.785 next. Stop-loss level is placed 3 bids below RM0.64 (S1) at RM0.625. Violation of which, the next support level is seen at RM0.565 (S2).

PMETAL (Not Rated). Yesterday, PMETAL rose 11.0 sen (5.12%) on the back of strong trading volume to settle at RM2.26. The underlying outlook has turned bullish-bias as it currently hovers above all its key SMA levels. Meanwhile, MACD is also depicting a bullish outlook on the back of stronger RSI. Should follow-through buying persist, the share price could look to resume its uptrend trajectory to complete its ‘rounding bottom’ formation towards RM2.44 (R1) in the near-term. Nonetheless, we are aware of the prolonged overbought situation shown by the Stochastic at this juncture, which we felt could induce some profit taking by investors in the near-term to neutralise its overbought level. Immediate supports are noted at RM2.19 (S1) followed by RM2.04 (S2) next. 

Source: Kenanga Research - 3 Mar 2016