HARBOUR-LINK GROUP BERHAD (Technical Buy)

• Harbour-Link Group Berhad (HARBOUR) closed at RM1.44 yesterday, posting a modest gain of 0.70%. The stock has been consolidating within a symmetrical triangle pattern after a strong rally earlier this year. This pattern indicates that a breakout could be imminent as the stock approaches the apex of the triangle. Moreover, the convergence of the short-to-medium term moving averages (5-day, 13-day, and 50-day SMAs) further reinforces the potential for a trend reversal.
• From a technical standpoint, the stochastic oscillator is at 49.07, displaying signs of upward movement, is suggesting building buying interest. The Tom Demark Pressure Ratio (TDRP) stands steady at 56.27, indicating reduced selling pressure. Additionally, the RSI sits at 49.87, close to neutral territory, which may signal that the stock is preparing for an upward breakout.
• Key resistance lies at RM1.44, aligning with the 61.8% Fibonacci retracement level. A successful breakout above this point could drive the stock toward RM1.52, which corresponds to the 38.2% Fibonacci retracement level. On the downside, strong support is found at RM1.42 (50-day SMA), with additional support at RM1.37 (200-day SMA), providing a solid foundation against potential declines.
• For traders anticipating a breakout, accumulating around the RM1.42-RM1.44 range could offer a strategic entry. A take-profit target at RM1.55 represents an upside potential of approximately 7.6%, while placing a stop-loss at RM1.35 helps manage risk with a potential downside of around 6.3%. This risk-reward setup presents an appealing opportunity for short-term traders looking to capture the anticipated breakout.

Source: Kenanga Research - 11 Oct 2024