EG INDUSTRIES BHD (Technical Buy)

• EG Industries Bhd (EG) managed to close above all its crucial SMAs, including 5-day, 13-day, 50-day and 200-day SMAs, ending at RM1.97 (+1.03%). The stock is consolidating within a narrow range near its 5-day and 13-day SMAs (both aligning around RM1.94), suggesting a stable base for potential movement.
• From a technical perspective, the stochastic oscillator stands at 52.68, showing early signs of trending upwards, which suggests that buying interest may be increasing. The Tom Demark Pressure Ratio (TDPR) is stabilising at 34.92, indicating reduced selling pressure. Additionally, the RSI is rising at 56.65, reflecting a slight positive bias with potential for further gains if upward momentum continues.
• Key resistance levels are RM2.05, which aligns closely with recent highs, followed by a stronger resistance at RM2.13. A breakout above these levels could signal a continuation of the uptrend. On the downside, immediate support is seen at RM1.94 (5-day and 13-day SMAs), with further support at the 50-day SMA at RM1.90, which could act as a buffer against deeper declines.
• We recommend making an entry at RM1.97, with a take-profit target set at RM2.10, offering an upside potential of about 6.6%. To mitigate risk, a stop-loss should be placed at RM1.89, limiting potential losses to approximately 4.1%.

Source: Kenanga Research - 1 Nov 2024