MELEWAR (Not Rated). MELEWAR has been consolidating for the past few weeks after staging a strong rally during the first half of September 2016. Yesterday, interest surrounding steel players started to show signs of resurgence, which includes MELEWAR, which rose 4.0 sen (7.69%) to close higher at RM0.56 on higher trading volume. With the underlying trend being supported by all its key moving averages, the strong hook up seen in Stochastic from its oversold threshold is indicating that a rebound play is on the cards. Should there be a follow-through in buying momentum, the stock could look to gear further up towards RM0.60 (R1) and possibly RM0.72 (R3) if it breaches its previous high level of RM0.64 (R2). Supports are found at RM0.52 (S1) and RM0.47 (S2).

MYCRON (Not Rated). Another steel player to register strong gains for the day was MYCRON, which surged 6.5 sen (7.9%) to RM0.89. Chart-wise, MYCRON’s share price began a strong run-up early last month, with its share price climbing from a low of RM0.45 to as high as RM1.01. The subsequent two weeks have seen low-volume profit taking, resulting in a healthy pullback to RM0.82. Nevertheless, renewed buying interest returned yesterday to trigger a consolidation breakout. The Stochastic indicator has also hooked up to signal a continuation of a prior uptrend. From here, expect bias to remain on the upside with immediate resistance levels to eye at RM1.00/1.01 (R1) and RM1.14 (R2) further up. Downside supports are seen at RM0.82 (S1) and RM0.73 (S2).

Source: Kenanga Research - 7 Oct 2016