Friday 6 April 2012

DAILY TRADING STOCKS: Naim Indah, Metronic Global


Naim Indah’s daily chart
Naim Indah  may rebound if it  can  hold above the support level. Late last month, we highlighted the possibility of  this stock  finding support above  the  psychological RM0.50 but  this failed to materialize. Our buying prerequisite was not fulfilled and the stock continued to slide. However, support is expected at above RM0.41, the low of early February, and the price action yesterday suggests that support is holding, with buying likely to have returned. As the stock  formed a “Bullish Engulfing” candle on improved volume, an upward continuation is still possible and  a  purchase can be made above Wednesday’s high of RM0.465, with a close below RM0.41 as the  stop loss.  An aggressive trader may  choose a close below yesterday’s low of RM0.43 as  the  stop loss. Resistance remains at the previous levels  of RM0.60 and RM0.70, provided that the psychological RM0.50 is broken convincingly. A successful violation of both levels could see the stock testing the psychological RM1.00 mark. This trade may not work out if the stop loss is triggered, and  consecutive closes below RM0.41 should confirm the weakness and may even spell the end of the 3-month uptrend.

Metronic’s daily chart
Metronic’s share price may climb after forming the positive candle yesterday. The stock was highlighted at the end of last month as it looked likely to face selling pressure below RM0.25. This turned out to be true and the stock fell subsequently. Nonetheless, it appears to have  found support just below the expected level of RM0.16, which is a  62% retracement of the 5-day rally in mid-March.  The “Bullish Engulfing” candle formed yesterday  shows the failure  of the  “Black” candles of Tuesday and Wednesday to elicit further selling. Therefore, a  rebound is likely  to ensue and a purchase can be made above  the  Wednesday-high of RM0.165, with a close below RM0.15 as  the  stop loss.  The price target is the RM0.25 resistance level, with a successful violation even seeing the stock hit the round figure of RM0.40,  considering that there is no clear resistance above the all-time intraday high of RM0.315.  This is provided that  the minor resistance  at  RM0.20 is broken convincingly. The upward bias will be nullified should the stop loss be triggered, a development that could even spell the end of the uptrend. Expect strong support at the psychological RM0.10.

Source: OSK188

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