INNO (Trading Buy, TP: RM1.73, SL: RM1.07). INNO’s share price surged 8.0 sen (7.1%) yesterday to finish at RM1.20. Trading volume rose to triple the 30-day average, clocking in 632k shares for the day. Chart-wise, INNO has been on a strong uptrend since October, with its share price climbing from a low of RM0.65 (5 Oct 2016) to as high as RM1.27 barely two months later. The share price subsequently entered into a sideways consolidation phase. However, renewed buying interest yesterday resulted in a breakout of a “Bullish Pennant” pattern. This indicates that the share price is poised to resume its uptrend after a brief pause for breath. Based on the “Flagpole” measurement objective, INNO’s share price could potentially climb to RM1.76 with RM1.27 (R1) and RM1.45 (R2) the likely resistance levels in between. Investors may enter now, with a stop-loss just below the RM1.10 (S1) support.

BENALEC (Not Rated). BENALEC surged 5 sen (13.33%) to close at RM0.425 yesterday on the back of strong trading volume to settle above all its key SMA trend lines. While yesterday’s surge could put an end to BENALEC’s downtrend pattern, a breach above the RM0.45 (R1) level is much needed to offer more convictions for further upside movement. We observe that historically, the stock tends to undergo a retracement whenever there is a surge in share price in tandem with an overbought display by the Stochastic. With deeply overbought condition showcased by RSI and Stochastic as of now, we do not discount the possibility that the stock could perform a ‘dead cat bounce’. Hence, interested investors should enter the stock with caution. Key supports are noted at RM0.40 (S1)/RM0.35 (S2) while key resistance levels are located at RM0.45 (R1)/RM0.47 (R2).

Source: Kenanga Research - 4 Jan 2017