PMETAL (Trading Buy, Increase TP: RM2.73, SL: RM2.28). Earlier last year, we recommended PMETAL after the share price broke out of its consolidation zone (report dated 13-Oct-2016 @ RM1.56). The share price had since rallied to a fresh all-time high of RM2.48 yesterday, up by 13.0 sen (5.53%) for the day. Nevertheless, the technical chart suggests that the rally still has legs. Consequent to the bullish move yesterday, PMETAL has now broken out of a “Bullish Flag” pattern to signal an uptrend continuation after a brief two-week pause. The momentum indicators remain bullish and from here, we expect PMETAL to chart further gains towards RM2.50/RM2.52 (R1), RM2.65 (R2) and possibly the “Flagpole” measurement objective of RM2.76 (R3). Downside appears limited, with support envisaged at RM2.40 (S1) and RM2.31 (S2), below which we would advise placing a stop-loss.

SHELL (Not Rated). SHELL rose surged 59.0 sen (18.27%) to close at RM3.82 on the back of strong volume yesterday. The strong price action has resulted in SHELL staging a breakout from its uptrend channel resistance level of RM3.50 (S1), and looking to test its immediate resistance line of RM3.96 (R1). Technical readings are looking encouraging with the MACD setting a higher high on its bullish convergence, while a hook-up in daily RSI is depicting pilling bulls on the stock. If SHELL manage to swiftly take out its immediate R1 level, the stock could set sights at RM4.41 (R2) next. Meanwhile, failure to capture the R1 level would see the stock consolidating where supports are found at RM3.50 (R1)/RM3.00.

Source: Kenanga Research - 1 Mar 2017