WCT HOLDINGS BHD (Technical Buy)

• WCT Holdings Berhad (WCT) closed at RM0.935 yesterday, recording a gain of 2.19%. After experiencing a prolonged downtrend, the stock has shown some signs of recovery, having found support near the RM0.890 level. This slight upward momentum suggests the potential for further stabilization or a reversal.
• From a technical perspective, the stochastic oscillator remains deeply oversold, currently at 8.67, which may signal the beginning of renewed buying interest. The Tom Demark Pressure Ratio (TDRP) is stabilizing at 48.69, indicating a reduction in selling pressure. The RSI has begun to trend upward at 45.30, further suggesting a potential rebound from bearish territory. The stock has also displayed a similar pattern in its weekly chart, reinforcing the bullish outlook.
• Looking ahead, a decisive cross above the immediate resistance level of RM0.960 (aligned with 13-day SMA) would confirm the trend reversal, paving the way for the stock to test further resistance at 1.02. Conversely, a dip below its key support level at RM0.890 may suggest a renewed downward trend.
• Hence, we recommend entering the stock at RM0.935 with a take-profit target set at RM1.01, offering a potential upside of about 8.0%. To manage risk, we suggest setting a stop-loss at RM0.88, limiting potential losses to approximately 5.9%.

Source: Kenanga Research - 9 Oct 2024