MELEWAR (Not Rated). MELEWAR faced a technical sell-down back in 29 November, before it undergo a 2-weeks consolidation period. Nonetheless, MELEWAR surged 3.5 sen (9.21%) to close at RM0.415 yesterday to break out from its consolidation zone resistance turned-support level of RM0.385 (S1) on strong trading volume. MACD histogram has staged a bullish crossover in tandem with a hook up in RSI, reflecting the sudden surge in buying interest on the stock. From here, MELEWAR would look to test its immediate resistance of RM0.445 (R1) before it could look to gear towards RM0.515 (R2). Failure to take out the R1 level would result in the stock continuing on its consolidation play, where support levels are seen at RM0.385 (S1) and RM0.35 (S2).

SYSTECH (Not Rated). In tandem with strong trading volume, SYSTECH rose 1.5 sen (6.82%) to close at RM0.235 to form a ‘bullish engulfing’ candlestick yesterday. The price action came in accordance with a technical breakout from its key resistance-turned-support level of RM0.23, post the formation of an ‘Doji’ candlestick two days ago. With SYSTECH trading above its up-trending short-and-mid term SMA alongside the continued bullish convergence of MACD histogram, bias is leaning towards the upside as the stock set sights on RM0.25 (R1)/0.265 (R2) to complete its 14-months ‘rounding bottom’ chart pattern. Near-term support levels are currently tied at RM0.23 (S1) followed by RM0.21 (S2).

Source: Kenanga Research - 22 Dec 2016