KSL HOLDINGS BERHAD (Technical Buy)

• KSL Holdings Bhd (KSL) last closed at RM1.79, remaining flat yet showing signs of stabilisation as it consolidated near recent levels. Notably, the convergence of key short-term moving averages (5, 13, and 50-day SMAs) around the current price level suggests an imminent decisive movement, with an upside bias given the encouraging technical indicators.
• The stochastic oscillator has improved to 16.52, signalling that the stock is gradually moving out of oversold territory, which may attract renewed buying interest. The Tom Demark Pressure Ratio (TDPR) is at 36.96, reflecting reduced selling pressure and further supporting the potential for a rebound. The RSI has trended higher to 47.71, edging closer to the neutral 50-mark, indicating a positive shift in momentum. Furthermore, a bullish divergence in the RSI implies that buying strength is gradually emerging as the price consolidates, hinting at a possible trend reversal.
• Immediate resistance stands at RM1.82, aligning with the 23.6% Fibonacci retracement level, followed by RM1.87. A breakout above these levels could pave the way for a rally toward RM1.94, reinforcing the bullish outlook. On the downside, key support is located at RM1.73, around the 200-day SMA, with further support at RM1.65, which should act as a buffer against deeper pullbacks.
• For traders looking to capture a potential reversal, accumulating between RM1.76 and RM1.79 may present an attractive entry point. Setting a take-profit target at RM1.90 offers an upside potential of approximately 6.1%, while a stop-loss at RM1.70 limits downside risk to around 5.0%. This setup provides a favourable risk-reward profile, appealing to traders aiming to capitalise on a potential bullish shift in KSL's price action.

Source: Kenanga Research - 1 Nov 2024