DAILY TRADING STOCKS: Ariantec Global, M3 Technologies

Ariantec’s daily chart

Ariantec may  trade  lower  after forming negative candles in the past 2 days. The stock was has moved  favourably after it was highlighted 2 months ago, considering that it has breached our target of RM0.08. However, it appears that the stock is facing selling pressure at the psychological RM0.20. The negative candles of  the  “Shooting Star” and “Bearish Engulfing” in the past 2 days indicate selling pressure.  The high volume that accompanied the candles also give rise to the possibility that distribution was made. Thus, an aggressive trade may choose to liquidate positions just below RM0.20 in anticipation of lower prices. A conservative trade may exit on a close below yesterday’s low of RM0.17 instead. The price target is the prior high of RM0.135, also a Fibonacci retracement level of  the  4-day rise. Further support is at RM0.10, where a violation may signal the end of the 2-month uptrend. The weak bias will be neutralized should the stock close above RM0.20. This should lead to a continuation of the rally. If so, look for  the stock to test the recent intraday high of RM0.25 and thereafter, the round figure of RM0.30.

M3’s daily chart

M3 may trade higher after breaking the long-term resistance level. The stock is on a solid uptrend for the past year, as evidenced from the series of higher lows.  Nonetheless, it spent the last 4 months consolidating the gains. The consolidation is now over with the expected continuation of the upward movement, more so when it broke above last year’s high of RM0.28 yesterday.  It even closed above  the  5-year resistance level of RM0.30, highlighting the strength  of the  upward bias. The breakout looks good too as it occurred on a “Long White” candle and accompanied by a volume spike. Thus, the upward continuation is expected and purchases can be made above RM0.30 with a close below RM0.28 as a stop loss, while a conservative trade may choose RM0.25 as  a  stop instead. The price target is the early 2007-high of RM0.40 and a strong move may even see the test of RM0.55 – the high of 2006. The trade may not work out should  the price close below RM0.25 and if this happens, it would take a while before a test of RM0.30 could  take place again.

Source: OSK188