MITRA (Trading Buy, TP @ RM1.77). Construction players were in the limelight once again after news emerged that MRT Corp is expected to award the MRT Sungai Buloh-Serdang-Putrajaya (SSP) line contracts worth RM10.0b within six months. Buoyed by the bullish news, MITRA rose 6.0 sen (4.69%) yesterday to stage a technical breakout away from its ‘Symmetrical Triangle’ chart pattern by closing at RM1.34. Key momentum indicators are potraying a bullish technical outlook ahead, with the MACD histogram undergoing its bullish convergence away from the zero-line while RSI is also reflecting buying pick-up on the stock. With the bullish technical breakout, we are recommending a ‘Trading Buy’ call on the stock with expectations that the share price will trend towards RM1.60 (R1) and possibly our target objective of RM1.77 (3 bids below RM1.80 (R2) level). Supports are located at RM1.30 (S1) followed by RM1.20 (S2), with protective stop-loss placed at RM1.17 (3 bids below S2 level).

MYCRON (Take Profit @ RM0.535). Recall that last week (4-May), we recommended a Trading Buy on MYCRON (RM0.445) after the share price broke out of a “Bullish Flag” chart pattern. The share price has performed mostly to our expectations, having rallied to as high as RM0.60 (+33.3%) before closing at RM0.535 yesterday (down 0.5 sen or 0.9% for the day). Nevertheless, yesterday’s failure in retaining its intraday gains has resulted in the formation of a “Shooting Star” candlestick – potentially signalling a bearish reversal. At the same time, the RSI is also inching downwards from oversold levels – both indicating that MYCRON may be vulnerable to further profit taking activities. Hence, shorter term traders should consider taking some chips of the table for now, and look to buy lower at RM0.45 (S1) and RM RM0.40 (S2). At this juncture, only a decisive close above RM0.60 (R1) could negate our concerns and pave a clear path towards RM0.75 (R2). 

Source: Kenanga Research - 13 May 2016