SKB SHUTTERS CORPORATION BERHAD (Technical Buy)

• Following its multi-year high of RM0.860 on 25th of September, SKBSHUT has trended downwards to RM0.57, and aligned with the 50-day Simple Moving Average (SMA). Recently, it rebounded from this SMA level, closing 3.15% higher at RM0.655, forming a symmetrical triangle pattern. As the price approaches the apex, it carries the potential for a bullish breakout above the upper trend line. This optimistic outlook is further reinforced by the convergence of short-term and middle-term SMAs (5 and 13- day), indicating an impending robust upward movement.

• Technically speaking, the ascending trajectories of both the Stochastic Oscillator and the Tom Demark Pressure Ratio (TDRP) suggest that there could be resurgence in buying interest on the horizon. The MCDX's banker chip meanwhile, is also improving, further supporting the notion of strengthening buying momentum.

• A clear break above the critical resistance level of RM0.665 could prompt the stock to challenge the next substantial resistance levels at RM0.680 and RM0.735 next. On the other hand, a significant decline below the key support level of RM0.625 may initiate a downward trend.

• We suggest an entry into the stock at RM0.665 or close to its 13-day SMA, targeting a take-profit level at RM0.725, which presents a potential upside of approximately 9.0%. To mitigate risk, we recommend setting a stop-loss at RM0.620, corresponding to a potential downside of roughly 6.8%.

Source: Kenanga Research - 7 Nov 2023