PERDANA PETROLEUM BERHAD (Technical Buy)

• Perdana Petroleum Berhad (PERDANA) closed at RM0.285 yesterday, posting a modest gain of 1.79%, as the stock consolidates near key support levels. The price action suggests ongoing accumulation at the lower end of its range, highlighting potential for a rebound if buying momentum strengthens. The convergence of its key SMAs (5, 13, and 50-day) around RM0.290-RM0.295 indicates the likelihood of a decisive movement in the near term.
• From a technical perspective, the stochastic oscillator stands at 40.74, trending upward as the stock emerges from oversold conditions, signalling a potential recovery. The Tom Demark Pressure Ratio (TDPR) at 70.33 reflects reduced selling pressure, reinforcing the possibility of a rebound. Meanwhile, the RSI has inched higher to 44.06, pointing to improving momentum, though it remains below the neutral 50-level, leaving room for further upside. The presence of a "bullish divergence" in the RSI on the daily chart strengthens the case for upward movement.
• Immediate resistance lies at RM0.295, followed by a more significant level at RM0.300, coinciding with the 50-day SMA and prior price highs. A breakout above these levels could see the stock testing RM0.320, marking the next notable resistance zone. On the downside, immediate support is seen at RM0.270, with further support at RM0.245, providing a cushion against potential pullbacks.
• For traders looking to capitalise on a possible rebound, accumulating between RM0.275-RM0.285 could offer a strategic entry point. Setting a take-profit target at RM0.315 offers an upside potential of approximately 10.5%, while a stop-loss at RM0.265 limits downside risk to around 7.0%. This setup presents a favourable risk-reward profile, ideal for traders aiming to leverage a potential recovery in PERDANA's price trajectory.

Source: Kenanga Research - 19 Nov 2024