MICROLN (Trading Buy, TP@ RM1.68). MICROLN has formed a ‘broadening formation’ chart pattern since April, where it is currently trading at the lower support trend lines. The stock received some buying support to rebound 4.0 sen (+2.9%) from its recent sell-down yesterday to close at RM1.42. Over the past few days, we observe that trading volume has started to pick up. Being in an oversold position as depicted by the RSI and Stochastic, both indicators seem on course to reverse from the aforesaid levels to suggest that buying momentum is resurfacing. If the stock garners strong buying interest over the next few days, it could set sight for a rebound play towards RM1.50 (R1) and possibly our target objective of RM1.68 (3 bids below RM1.71 (R2)). Meanwhile, downside supports are envisaged at RM1.35 (S1) followed by RM1.25 (S2), where our stop-loss level is placed at RM1.32 (3 bids below RM1.35 (S1)).

AEONCR (Not rated). Yesterday, AEONCR surged 48.0 sen (3.6%) to close at a fresh 12-month high of RM14.02 on high trading volume, following through an earlier breakout of the RM13.20-RM13.40 consolidation phase (last week) to signal a continuation of its short-medium term uptrend. The share price is now in the midst of retesting the RM14.00/14.12 (R1) resistance. However, a positive showing by the indicators (MACD crossing above the zero-line and the RSI hooking upwards) suggest a good possibility of punching through these resistance levels. Once cleared, AEONCR would then have a clear path towards the May-2015 highs of RM15.00 (R2) and possibly RM16.00 (R3) next. Downside supports are identified at RM13.36 (S1) and RM12.87 (S2).

Source: Kenanga Research - 27 Jul 2016