BM GREENTECH BHD (Technical Buy)

• BM Greentech Bhd (BMGREEN) closed at RM1.80, down 1.10% yesterday. The stock continued to consolidate near key moving averages, indicating a potential base-building process. The convergence of the 5, 13, and 50-day SMAs suggests that the stock is at a critical juncture, which could lead to a decisive move if buying interest strengthens.
• From a technical perspective, the stochastic oscillator is at 27.40, indicating that the stock is exiting oversold conditions, which could attract buyers if the upward momentum continues. The Tom Demark Pressure Ratio (TDPR) is stable at 51.13, reflecting moderate selling pressure that appears to be easing. Additionally, the RSI is trending around 54.21, slightly above the neutral 50-mark, signalling a modest increase in momentum that may support further upside if sustained.
• Looking forward, a breakout above the immediate resistance at RM1.86 (aligning with the 23.6% Fibonacci retracement), could drive the stock towards the next resistance level at RM2.00. On the downside, key support level is at RM1.78 (5-day SMA), with additional support at RM1.75, coinciding with crucial 50-day SMA.
• For traders seeking to capitalise on a potential reversal, accumulating around RM1.78 to RM1.80 may offer a strategic entry point. A take-profit target at RM1.95 represents an upside potential of approximately 8.3%, while a stop-loss at RM1.70 limits downside risk to around 5.6%. This setup provides a favourable risk-reward profile, allowing traders to potentially benefit from a bullish turnaround in BM GREEN's price action.

Source: Kenanga Research - 8 Nov 2024