AVALAND BERHAD (Technical Buy)

• Avaland Berhad (AVALAND) closed at RM0.280 yesterday, remaining unchanged as the stock consolidates near critical support levels following a persistent downtrend. The current price action suggests potential stabilisation around the RM0.270 level, supported by the 61.8% Fibonacci retracement zone, as the stock forms a potential base for recovery. The alignment of the 5-day and 13-day SMAs at RM0.285 and RM0.290, respectively, further highlights a crucial juncture for the stock, where a reversal may be triggered by renewed buying interest.
• From a technical perspective, the stochastic oscillator stands at 18.89, lingering in the oversold territory, indicating the potential for a recovery in the near term as momentum begins to build. The Tom Demark Pressure Ratio (TDPR) at 43.78 reflects easing selling pressure, paving the way for a potential rebound. Meanwhile, the RSI is at 39.25, slightly below the neutral 50-mark, but the gradual upward trend signals improving momentum. A bullish divergence on the RSI further strengthens the case for a possible turnaround as the price stabilises.
• Immediate resistance lies at RM0.285, coinciding with the 5-day SMA and 50% Fibonacci retracement level. A breakout above this resistance could propel the stock toward RM0.290, followed by RM0.300, marking key resistance zones aligned with previous price levels. On the downside, immediate support is observed at RM0.270, with additional support at RM0.255, providing a cushion against further pullbacks.
• For traders looking to capitalise on a potential rebound, accumulating the stock between RM0.275-RM0.280 may provide an advantageous entry point. A take-profit target at RM0.300 offers an upside potential of approximately 7.1%, while a stop-loss at RM0.260 limits downside risk to around 7.1%. This setup presents a balanced risk-reward profile, making it suitable for traders anticipating a recovery in AVALAND's price trajectory, supported by easing selling pressure and improving momentum.

Source: Kenanga Research - 21 Nov 2024