GTRONIC (Not Rated). Earlier this year, GTRONIC broke below its long-term trend-line at RM6.28 (11-Jan) and commenced a gradual decline to RM5.14. The share price then consolidated within a narrowing range over the next three months before breaking down (at RM5.27) to confirm a “Bearish Pennant” formation on Monday. Yesterday, the share price ended at RM3.89 (down by RM1.40 (-26.5% over the past two days). While the bearish technical picture has yet to show signs of abating, the Stochastic and RSI indicators are already deeply oversold - potentially signalling that a technical rebound may be on the horizon. Traders who wish to participate in a technical rebound may position themselves to enter closer to the RM3.63-3.70 (S1) support (Oct-2014 reaction low)/ “Bearish Pennant” measurement objective. Failing which, the RM3.41 (S2) resistance-turned-support should present a possible entry level. Overhead support levels to aim for are RM4.40 (R1) and RM4.88 (R2).

INARI (Not Rated). Semicon-player INARI was largely affected by the disappointing earnings reported by its peer GTRONICS yesterday, as investors turned wary on the semiconductor industry. INARI saw its share price dissipating by c.8.3% within two days as it dipped 8.0 sen (2.80%) to close lower at RM2.78 yesterday, breaking down from its support-turned-resistance level of RM2.80 (R1). The increasing trading volume over the past few days during the share price decline suggested that investors are taking profit on the stock amid the bearish sentiment over the semiconductor players. MACD has diverged further below the zero line, while RSI and Stochastic have plunged below the oversold threshold. While the share price outlook is looking bearish, we deem that the recent selling could be oversold as showcased by the momentum indicators. While we do not discount further downside risk towards RM2.64 (S1), we believe the share price could potentially find some buying support at the S1 level. Hence, we advocate interested investors to look out for potential rebound play at the aforesaid level before entering the stock. Resistance are seen at RM2.80 (R1) followed by RM3.10 (R2), while supports are noted at RM2.64 (S1) and 2.24 (S2).

Source: Kenanga Research