PMETAL (Trading Buy, TP: RM4.18, SL: RM3.49). Yesterday, PMETAL has garnered strong interest to surge 31 sen (+9.04%) to surpass our target price (report dated 9 June) and its all-time high level of RM3.49 and RM3.73 respectively to close at RM3.74. The primary trend of PMETAL is still healthy as the share price is currently trading above all its up trending SMAs on the back of a bullish MACD histogram display. Shall follow-through buying on the stock persist, PMETAL could look to test the psychological resistance level of RM4.00 (R1) in the near horizon and look to climb further up towards our revised target price of RM4.18 (3 bids below RM4.21 (R2) level) based on the Fibonacci extension measurement. On a side note, we recognise that the stock is currently in overbought condition as depicted by its RSI indicator. Thus we do not discount that the share price could look to consolidate in the near-term towards its resistance-turned-support level of RM3.73 (S1). Our ultimate stop-loss level would be set at RM3.49 (our previous target price) to secure our capital gains of 11.5%.

OLDTOWN (Trading Buy, TP: RM2.24, SL: RM 1.77). Last month, OLDTOWN announced its 4Q16 earnings, which showed a 80.4% YoY jump. Consequently, the share price broke out of its mild downtrend (RM1.47) and commenced a strong run-up to RM1.85 in a matter of days. The following three weeks were marked by a period of sideways consolidation. Nevertheless, OLDTOWN is now poised to resume its uptrend after the share price broke out of a “Bullish Flag” pattern” yesterday. The share price was up 7 sen (+3.8%) at RM1.92. At the same time, the MACD has just completed a Signal-line crossover to reflect a pick-up in positive momentum. Hence, we expect buying interest to continue over the coming weeks, with an anticipated climb towards RM2.00 (R1) and ultimately the “Flagpole” measurement objective of RM2.27 (R2). Downside appears limited with strong supports expected at RM1.88 (S1) and RM1.80 (S2) further down.

Source: Kenanga Research - 30 Jun 2016