TH PLANTATIONS BERHAD (Technical Buy)

• TH Plantations Berhad (THPLANT) closed at RM0.67 yesterday, surging by 5.51% as the stock gains momentum from a recent breakout. This upward movement, supported by increased trading volume, signals renewed buying interest and the potential for further gains if bullish sentiment persists. The stock has managed to cross above key moving averages, showing signs of a possible reversal.
• The stochastic oscillator has spiked to 74.03, reflecting heightened buying pressure, though it is approaching overbought territory. The Tom Demark Pressure Ratio (TDPR) sits at 79.59, suggesting a strong easing of prior selling pressure, which is supportive of the ongoing upward momentum. The RSI has also improved significantly to 57.48, moving above the neutral 50- mark, which is a bullish indicator that signals potential continuation of the upward trend. Furthermore, the RSI displays a bullish divergence, where the indicator continues to rise, further bolstering the case for a sustained rally.
• Immediate resistance is located at RM0.68, corresponding to the 50% Fibonacci retracement level. A breakout above this level could propel the stock towards RM0.73, followed by RM0.79, aligning with previous resistance levels. On the downside, support is seen at RM0.64, which aligns with its 200-day SMA and is near the 61.8% Fibonacci retracement level, providing a strong buffer. Further support is found at RM0.61, offering additional stability against pullbacks.
• For traders aiming to capture the bullish momentum, accumulating between RM0.64 and RM0.67 may provide a strategic entry. A take-profit target at RM0.73 offers an upside potential of around 9.0%, while a stop-loss at RM0.62 keeps downside risk to approximately 9.0%. This setup presents a balanced risk-reward profile, making it suitable for traders looking to benefit from THPLANT's positive price action.

Source: Kenanga Research - 4 Nov 2024