INFOLINE TEC GROUP BHD (Technical Buy)

• Infoline Tec Group Bhd (INFOTEC) closed at RM0.975 yesterday, marking a modest gain of 0.52%. The formation of a 'hammer' candlestick pattern on its daily chart, positioned above key support levels including the 13-day, 50-day, and 200-day SMAs, indicates a potential reversal. The upward trajectory of all major SMAs further reinforces the likelihood of sustained bullish momentum.
• Technically, the stochastic oscillator rising at 61.33 reflects building buying momentum, while the Tom Demark Pressure Ratio (TDPR) stabilising at 50.01 indicates reducing selling pressure, supporting the likelihood of upward movement. Meanwhile, the RSI at 57.26 shows neutral-to-positive momentum with room for further gains.
• Immediate resistance is observed at RM0.985 (5-day SMA), with the next resistance levels at RM1.00 (38.2% Fibonacci retracement) and RM1.08 (23.6% Fibonacci retracement) and RM1.08. On the flip side, immediate support is at RM0.955 (aligning with 13-day SMA), with additional support at RM0.940 (50% Fibonacci retracement) and RM0.915 (50-day SMA).
• We recommend entering the stock near RM0.975 and targeting a take-profit level at RM1.05, representing an upside potential of about 7.7%. To manage risk, a stop-loss should be placed at RM0.91, limiting potential losses to around 6.7%.

Source: Kenanga Research - 27 Nov 2024