AFFIN BANK BERHAD (Technical Buy)

• Affin Bank Berhad (AFFIN) closed at RM2.89 last Friday, gaining 1.40%, as the stock demonstrates signs of stabilisation following a recent retracement. The price action reflects a consolidation phase near critical support levels, suggesting potential for a rebound if buying interest strengthens. Notably, the stock remains supported by the 200-day SMA at RM2.75, which reinforces its medium-term bullish outlook despite recent corrections.
• From a technical perspective, the stochastic oscillator stands at 15.85, recovering from deeply oversold levels and signalling a potential reversal. The Tom Demark Pressure Ratio (TDPR) at 45.66 indicates waning selling pressure, creating an environment conducive to a recovery. Meanwhile, the RSI has edged up to 43.19, showing improving momentum but still below the neutral 50-mark, suggesting further room for upside as sentiment improves. The alignment of key moving averages around RM2.89 further underscores the stock's proximity to a pivotal level.
• Immediate resistance is located at RM2.93, corresponding to the 13-day SMA. A breakout above this level could pave the way for further gains toward RM3.05, aligning with the 23.6% Fibonacci retracement level. Beyond this, the next significant resistance zone lies at RM3.14. On the downside, immediate support is observed at RM2.81, with additional support at RM2.75, coinciding with the 200-day SMA and serving as a robust cushion against pullbacks.
• For traders looking to capitalise on a potential rebound, accumulating the stock between RM2.84-RM2.89 may offer an advantageous entry point. A take-profit target at RM3.04 provides an upside potential of approximately 5.2%, while a stop-loss at RM2.74 limits downside risk to around 5.2%. This setup presents a balanced risk-reward profile, catering to traders anticipating a recovery in AFFIN's price trajectory driven by improving momentum and easing selling pressure.

Source: Kenanga Research - 25 Nov 2024