HTPADU BERHAD (Technical Buy)

• HeiTech Padu Berhad (HEITECH) closed at RM3.48, marking a minor decline of 1.14%, as the stock continues its consolidation near key support levels. The price action reflects a stabilising phase, with the stock holding above its immediate 50-day SMA support line at RM3.46, suggesting potential for a base formation if buying interest strengthens at these levels. The proximity of the 5-day SMA at RM3.48 and the 13-day SMA at RM3.52 indicates a narrow trading range, with the possibility of a decisive movement should a breakout occur.
• From a technical perspective, the stochastic oscillator sits at 14.06, deep in oversold territory, which could attract buyers if momentum begins to improve. The Tom Demark Pressure Ratio (TDRP) is at 36.74, signalling a reduction in selling pressure, supportive of a potential rebound if volume increases on the buy-side. Additionally, the RSI has ticked up slightly to 45.62, approaching the neutral 50 level, which could suggest improving momentum if the stock continues to hold or increase at these levels.
• Immediate resistance is identified at RM3.55, aligning with the 23.6% Fibonacci retracement level. A successful breakout above this level could pave the way for further gains, with the next resistance at RM3.80. On the downside, support is located at RM3.26, with further support around RM3.10, offering a cushion against potential pullbacks.
• For traders looking to capitalise on a potential reversal, entering around RM3.40-RM3.48 may offer a strategic entry point. A take-profit target at RM3.74 provides an upside potential of approximately 7.4%, while setting a stop-loss at RM3.25 limits downside risk to around 6.6%. This setup presents a balanced risk-reward profile, suitable for traders aiming to capture a potential bullish turnaround in HEITECH's price action.

Source: Kenanga Research - 15 Nov 2024