RANHILL UTILITIES BHD (Technical Buy)

• Ranhill Utilities Bhd (RANHILL) closed at RM1.29 yesterday, marking a 1.57% gain. The stock has been consolidating near the 61.8% Fibonacci retracement level at RM1.27, suggesting the formation of a strong support base. The convergence of the short-term (5-day), medium-term (13-day), and long-term (200-day) SMAs indicates a possible trend reversal and breakout from its current consolidation.
• From a technical standpoint, the stochastic oscillator remains in oversold territory at 17.09, which may signal the beginning of renewed buying interest. The Tom Demark Pressure Ratio (TDRP) has risen to 58.65, indicating a reduction in selling pressure. The RSI is consolidating at 46.59, which reflects neutral sentiment with potential for an upward move.
• Looking forward, a decisive climb above the immediate resistance at RM1.33 (50-day SMA) could drive the stock towards the next resistance levels at RM1.36 and RM1.39. On the flip side, a breach below the lower boundary of the consolidation range at RM1.26 may initiate a downward trend.
• We recommend entering the stock at RM1.29 with a take-profit target set at RM1.38, which presents a potential upside of about 7.0%. To manage risk, we suggest setting a stop-loss at RM1.25, capping potential losses at approximately 3.1%.

Source: Kenanga Research - 17 Oct 2024