TECHNICAL BUY

Micro-Mechanics Ltd – Daily timeframe (Update from 6 February 2018)

*Entry Price: 2.22                                Stop loss : 1.89                       Take profit : 2.45

*Micro-Mechanics Ltd will be added to the Phillip 20 Portfolio once the trade is triggered

Current Sentiment: Bullish

Support 1: 2.20                     Resistance 1: 2.24

Support 2: 1.90                     Resistance 2: 2.45

The hammer rejection on 05/02/18 from the last update failed to hold as price gapped down below it one day later. Nonetheless, the long-term uptrend remains intact as the 1.94 Higher Low (HL) point from 07/12/17 remains untested.

After the huge gap down in price on 06/02/18, there was some recovery and the current price action suggests further sign of strength. The subsequent bullish follow through on 20/02/18 finally broke price above the 2.12 immediate range high and 20 day moving average signals a possible move back into the uptrend. Moreover, the bullish follow through on 20/02/18 was also backed up increasing volume.

Watch for further bullish follow through for the bullish momentum to sustain where buyers target the 2.24 resistance area followed by 2.45. For this upswing, we are expecting the 06/02/18 low of 1.97 to be the next Higher Low (HL) point for this uptrend.

Note: Our current fundamental view on Micro-Mechanics is an Accumulate rating with a fair value of $2.50.