FGV HOLDING BERHAD (Technical Buy)

• FGV Holdings Berhad (FGV) closed at RM1.09 last Friday, with a modest gain of 0.93%. The stock has been consolidating within the RM1.06-RM1.10 range following a sharp sell-off on 20th September, indicating that it is attempting to establish a support base. Notably, its weekly chart also presents a 'doji' candlestick pattern, which often signals market indecision and a potential trend reversal, suggesting that a rebound could be on the horizon.
• From a technical standpoint, the stochastic oscillator is showing signs of recovery from oversold conditions, currently at 20.26, indicating that selling pressure has eased and accumulation may be underway. The Tom Demark Pressure Ratio (TDRP) remains low at 10.98, further supporting the diminishing selling pressure. Meanwhile, the RSI is trending upwards from oversold territory at 38.17, reinforcing the potential for a near-term rebound.
• Key resistance levels include RM1.13, which aligns with the 13-day SMA, followed by RM1.15 at the 5-week SMA. A successful break above these levels could propel the stock toward RM1.18, coinciding with the 50-day SMA. On the downside, key support levels are identified at RM1.06, followed by the recent low of RM1.04.
• For traders seeking a potential rebound opportunity, accumulating the stock near RM1.09 could offer an advantageous entry point. Setting a take-profit target at RM1.15 provides an upside potential of approximately 5.5%, while placing a stop-loss at RM1.03 limits downside risk to around 5.5%, offering a well-balanced risk-to-reward ratio for short-term recovery play in FGV.

Source: Kenanga Research - 7 Oct 2024