MAH SING GROUP BERHAD (Technical Buy)

• Mah Sing Group Bhd (MAHSING) closed at RM1.77 yesterday, posting a gain of 2.31%. The stock has been building momentum after consolidating within a tight range near its 5, 13, and 50-day SMAs, which hover around the RM1.68-RM1.72 level. Recent price action suggests the stock is testing its immediate resistance at RM1.80, hinting at the possibility of a breakout.
• On the technical front, the stochastic oscillator is trending higher at 52.75, suggesting increasing buying interest. The Tom Demark Pressure Ratio (TDPR) remains stable at 73.68, indicating reduced selling pressure. Additionally, the RSI is rising at 52.32, highlighting growing momentum and signalling further potential upside.
• The immediate resistance to monitor is at RM1.80, a critical level for the stock. A breakout above this point could trigger further gains, with the next target at RM1.96, a key resistance level. On the downside, immediate support lies at RM1.72 (aligned with the 13-day SMA) and RM1.69 (50-day SMA), both serving as strong buffers against potential pullbacks.
• For traders looking to capitalize on this potential breakout, accumulating near the RM1.75-RM1.77 level offers a strategic entry point. A take-profit target at RM1.95 provides an upside potential of approximately 10.2%, while setting a stop-loss at RM1.66 limits downside risk to around 6%. This setup presents a favorable risk-reward ratio for short-term traders aiming to benefit from MAHSING's potential rally.

Source: Kenanga Research - 18 Oct 2024