MALAKOFF CORPORATION BHD (Technical Buy)

• Malakoff Corporation Bhd (MALAKOF) closed at RM0.915 yesterday, posting a modest gain of 1.10%. The stock is currently consolidating between RM0.900 and RM0.915, suggesting that it is in a phase of accumulation before a potential breakout. The price remains above its 200-day SMA (RM0.752), which continues to act as a strong long-term support.
• From a technical standpoint, the stochastic oscillator is hovering around 21.41, slightly above oversold levels, signalling that a potential trend reversal may be on the horizon. The Tom Demark Pressure Ratio (TDPR) remains stable at 60.22, suggesting that selling momentum has subsided. Additionally, the RSI is at 49.92, remaining near neutral, which reinforces the potential for further upside movement.
• Key resistance levels to watch include RM0.925 (13-day SMA), with stronger resistance at RM0.950. A breakout above these levels could potentially drive the stock towards RM1.00, a psychological level close to its recent high of RM1.02. On the downside, if the stock breaks below RM0.870, it could signal a renewed downward trend.
• We recommend entering the stock at RM0.915 with a take-profit target of RM0.99, representing a potential upside of about 8.2%. To manage risk effectively, a stop-loss should be placed at RM0.865, limiting potential losses to approximately 5.5%.

Source: Kenanga Research - 11 Oct 2024