CLOUDPOINT TECHNOLOGY BERHAD (Technical Buy)

• CLOUDPT's share price missed our earlier prediction, triggering our previous stop-loss at RM0.605 last Thursday. Subsequently, the stock dropped by an additional 4% to RM0.580 before rebounding and closing at RM0.595 yesterday. This closing price formed a “bullish Harami” chart pattern, indicating a potential change in trend.

• In terms of technical analysis, the stochastic oscillator has moved into the oversold territory and is displaying signs of a reversal from its previous downward trend.

• If the stock can sustain a break above the immediate resistance at RM0.610, it may pave the way for a rally to RM0.645. Conversely, falling below the support level of RM0.580 could initiate a new downtrend.

• Our recommendation is to consider entering a position at RM0.595, with a target for profit-taking at RM0.645, offering a potential upside of 8%. To manage risks, we advise implementing a stop-loss at RM0.575, equivalent to a downside risk of approximately 3.3%.

Source: Kenanga Research - 25 Oct 2023