INARI (Not Rated). INARI caught our attention yesterday after it spiked 15 sen (6.9%) to close at RM2.32. We like yesterday’s white “Marubozu” candlestick, which represented a breakout from a 2-month consolidation, coupled with high trading volume – 12.9m shares exchanging hands, as compared to its daily average of 6.9m shares. Yesterday’s price action also brought an uptick to all key indicators, with the MACD-signal spread further widening. From here, we expect the share to trend further upwards before meeting resistances at RM2.38 (R1) and RM2.47 (R2). Support can be found at RM2.08 (S1), with another at RM1.99 (S2) further below.

MERGE (Not Rated). Yesterday, MERGE closed 5.5 sen (12%) higher at RM0.515. Yesterday’s move may possibly pose as a resumption of the previous uptrend, which took a breather in the previous few days as it underwent a brief downward consolidation. This uptrend was also accompanied by volume trends that positively coincide with the share’s price movements, with yesterday’s trading volume also greatly above average at 3.2m shares, as compared to a daily average of 1.3m shares. From here, however, we expect strong resistances at its 30-month high at RM0.575 (R1). Once taken out decisively, other resistances can be found at RM0.65 (R2) and RM0.70 (R3) higher up. A failure to take out its immediate resistance will lead the share trending towards support levels found at RM0.50 (S1), with lower supports at RM0.45 (S2), and RM0.41 (S3).

Source: Kenanga Research - 13 Jul 2017