FAJARBARU BUILDER GROUP BERHAD (Technical Buy)

• Fajarbaru Builder Group Bhd (FAJARBARU) closed at RM0.425 yesterday, gaining 2.41%. The stock has been trading above its key moving averages, indicating positive momentum. It is currently consolidating near the 5-day SMA of RM0.412 and the 13-day SMA of RM0.405, suggesting the formation of a base following its rebound from the 200-day SMA, with buying interest gradually strengthening.
• From a technical perspective, the stochastic oscillator has climbed to 76.06, placing the stock in overbought territory. However, the sustained upward trend suggests continued buying momentum. The Tom Demark Pressure Ratio (TDPR) stands at 56.48, reflecting reduced selling pressure, which supports the potential for further gains. Meanwhile, the RSI is trending at 48.55, showing improving momentum as it moves toward neutral ground. On the weekly chart, the stochastic and RSI also indicate a bullish trend emerging from oversold levels, reinforcing the positive outlook.
• The next key resistance level is at RM0.440, and a breakout above this point could propel the price toward RM0.470. On the downside, immediate support lies at RM0.405, aligned with the 13-day SMA, while stronger support can be found at RM0.390, coinciding with the 200-day SMA.
• For traders looking to capitalise on this momentum, accumulating near RM0.415-RM0.425 offers a strategic entry point. A take-profit target at RM0.465 provides an upside potential of approximately 9.4%, while a stop-loss at RM0.400 limits downside risk to around 5.9%, presenting a favourable risk-reward profile for those aiming to capture FAJARBARU's potential uptrend.

Source: Kenanga Research - 18 Oct 2024