CLOUDPOINT TECHNOLOGY BERHAD (Technical Buy)

• After six days of consolidation, CLOUDPT broke out of a range, closing at RM0.640 with increased trading volume. The stock's short-term 5-day SMA has crossed above its 13-day SMA, reinforcing bullish momentum.

• From a technical analysis standpoint, the stochastic oscillator is showing signs of a reversal from its previous downward trajectory. This is a positive indicator for potential upward price movement. Concurrently, the Tom Demark Pressure Ratio (TDRP) has also begun to exhibit an upward trend, particularly after its period of consolidation that started in early October. These technical indicators collectively suggest a bullish outlook.

• A sustained break above the immediate resistance of RM0.645 could pave the way for a rally to RM0.690. Conversely, falling below the support level of RM0.610 may initiate a new downtrend.

• We advise entering a position between RM0.625-RM0.640, targeting a take-profit at RM0.690, offering an estimated upside of 8%-10%. A stop-loss at RM0.605 is recommended, equating to a downside risk of 3%-5%.

Source: Kenanga Research - 18 Oct 2023