PERDANA PETROLEUM BERHAD (Technical Buy)

• Perdana Petroleum Berhad (PERDANA) closed at RM0.310 yesterday, gaining 3.33%, as it continued its recovery from a recent low of RM0.270. The stock is now challenging its 13-day Simple Moving Average (SMA) at RM0.322, showing early signs of recovery following the sharp declines in August and September.
• Technically, the stochastic oscillator has moved above oversold territory, registering at 24.84, which points to resurgence in buying interest. The Tom Demark Pressure Ratio (TDRP) has also surged to 61.01, signalling diminishing selling pressure. Furthermore, the Relative Strength Index (RSI) has displayed a bullish divergence, currently sitting at 35 and gradually climbing, indicating a shift in sentiment from bearish to neutral.
• Key resistance levels to monitor are RM0.325, in line with the 13-day SMA, and RM0.330, which corresponds to the 200-day SMA. A clear breakout above these levels could propel the stock higher, targeting RM0.345, aligned with the 38.2% Fibonacci retracement level, and potentially reaching RM0.360, where the 13-week SMA is positioned. On the downside, key support levels include RM0.295, with critical support at RM0.270, which offers a strong safety net.
• With improving technical indicators and a decline in selling pressure, investors might consider accumulating the stock around the RM0.310 level. A take-profit target of RM0.360 offers a potential upside of approximately 16.1%, while a stop-loss at RM0.270 minimizes downside risk to 12.9%. This risk-reward setup is appealing for traders seeking to capitalize on PERDANA's potential recovery.

Source: Kenanga Research - 8 Oct 2024