WCE HOLDINGS BERHAD (Technical Buy)

• After a 6-day period of consolidation, WCE Holdings Berhad (WCEHB) displayed a Morning Star chart pattern in its most recent trading session, suggesting a potential departure from its previous sideways movement. Additionally, the stock's shortterm 5-day Simple Moving Average (SMA) has begun to trend upwards after converging with its long-term 13-day SMA, indicating a bullish technical outlook going forward.

• Technically, the Stochastic Oscillator, set at 20,3,3 configurations, is showing upward momentum, marking a departure from its previous near-oversold condition. This bullish sentiment is corroborated by the Tom DeMark Pressure Ratio (TDPR), which points to a resurgence in buying interest.

• We anticipate that WCEHB will challenge its immediate resistance level at RM0.820 in the near term. A decisive break above this key resistance could set the stage for the stock to target the next significant resistance level, last seen in July 2018, at RM0.890.

• We suggest an entry point for the stock in the range of RM0.765 to RM0.785, aligned with its 13-day SMA. We set a target price at RM0.820, offering an estimated upside potential of 4.5% to 7.2%. To protect against downside risk, we recommend implementing a stop-loss at RM0.735, corresponding to a potential downside of approximately 6.4%.

Source: Kenanga Research - 2 Nov 2023