UZMA BERHAD (Technical Buy)

• UZMA's share price deviated from our earlier prediction, triggering our previous stop-loss at RM0.735 on Wednesday. However, the stock has seemingly established a base, recovering from a low of RM0.710 and closing at RM0.740 yesterday.

• From a technical perspective, the stochastic oscillator is currently in the oversold territory. Notably, the fast-moving %K line is converging with the %D line, indicating a potential trend reversal. Additionally, the Tom Demark Pressure Ratio (TDRP) is on an upward trend, suggesting renewed buying interest may be on the horizon.

• A sustained breach above the immediate resistance at RM0.755 (the 5-day Simple Moving Average (SMA)) could initiate a rally towards RM0.770 (the 13-day SMA) and RM0.805 next. Conversely, a decline below the support level of RM0.710 may lead to a retracement to RM0.680, aligning with the stock's 200-day SMA support level.

• Our recommendation is to consider a trading position at RM0.740, with a take-profit target of RM0.800, offering a potential upside of approximately 8.1%. To manage risks, we suggest implementing a stop-loss at RM0.700, representing a potential downside of approximately 5.5%.

Source: Kenanga Research - 27 Oct 2023