WCT HOLDINGS BERHAD (Technical Buy)

• WCT has been on a downward trend since reaching a recent high of RM0.595 a month ago but seems to have established a solid base at RM0.505. Recently, it began an upward movement and closed 1% higher at RM0.515, which aligns with its short-term (5-day) Simple Moving Average (SMA) level.

• Technically, WCT is showing promising signs with both the Stochastic Oscillator and the Tom Demark Pressure Ratio (TDRP) indicating a recovery from oversold conditions, which could signal renewed buying interest. Additionally, the rising activity in the MCDX’s banker chip suggests a bullish outlook. These factors collectively increase the likelihood of the stock moving higher.

• A clear break above the 5-day SMA and the 38.2% Fibonacci retracement level at RM0.520 could set the stage for the stock to target key resistance levels at RM0.540 and RM0.550. On the contrary, a drop below the critical support level of RM0.500 may lead to a decline towards RM0.475, aligning with the 61.8% retracement level.

• Our recommendation is to consider buying around RM0.515, near the 5-day SMA, aiming for a take-profit level at RM0.545, which represents an approximate 6.0% upside. To mitigate risks, a stop-loss should be placed at RM0.490, limiting potential losses to around 4.8%.

Source: Kenanga Research - 16 Nov 2023