MI TECHNOVATION BHD (Technical Buy)

• MI Technovation Bhd (MI) closed at RM2.01 yesterday, surging by 6.91%. It crossed above its crucial 50-day SMA at RM1.87 and formed a 'three white soldiers' candlestick pattern, indicating strong bullish momentum. This candlestick formation, combined with its closing price nearing the 200-day SMA (RM2.07) suggests a high likelihood of the stock breaking above this level, reinforcing its upward trajectory.
• From a technical standpoint, the stochastic oscillator is trending higher at 57.78, which signals increasing buying momentum. Meanwhile, the rising Tom Demark Pressure Ratio (TDPR) at 65.49 reflects diminishing selling pressure, further supporting the uptrend. The RSI climbing to 61.75 also suggests positive sentiment with potential for further gains.
• Immediate resistance lies at RM2.04 (50% Fibonacci retracement), with further upside potential toward RM2.07 (200-day SMA) and RM2.21, aligning with 38.2% Fibonacci retracement level. On the flip side, a dip below its 50-day SMA at RM1.87 may initiate a renewed downtrend.
• For traders looking to capitalize on this momentum, we recommend entering the stock near RM2.00 and target a take-profit level at RM2.20, offering an upside potential of approximately 10.0%. To manage risk, setting a stop-loss at RM1.85 limits downside risk to 7.5%, maintaining a favourable risk-reward balance.

Source: Kenanga Research - 25 Nov 2024