MALAKOFFF CORPORATION BERHAD (Technical Buy)

• Malakoff Corporation Berhad (MALAKOFF) closed at RM0.800 yesterday, posting a modest gain of 0.63%, as the stock consolidates above its 200-day SMA at RM0.785, a key support level. The recent price action suggests stabilisation following a downtrend, with the stock trading near a pivotal area that could facilitate a potential rebound if buying interest strengthens. The alignment of the 200-day SMA and the proximity to oversold conditions indicate an attractive entry point for bullish positioning.
• From a technical perspective, the stochastic oscillator is at 8.09, deep in the oversold territory, signalling potential for a technical rebound. The Tom Demark Pressure Ratio (TDPR) at 29.86 reflects declining selling pressure, creating an environment conducive to recovery. Meanwhile, the RSI is at 37.57, improving from oversold levels but still below the neutral 50-mark, highlighting early signs of momentum recovery. The stock's ability to sustain above its 200-day SMA underscores its medium-term support and improves the outlook for a rebound.
• Immediate resistance is located at RM0.815, coinciding with the 5-day SMA, with a breakout above this level paving the way toward RM0.845, representing the 13-day SMA and a key resistance zone. On the downside, immediate support is observed at RM0.785, aligned with the 200-day SMA, with additional support at RM0.760, providing a cushion against further pullbacks.
• For traders aiming to capitalise on a potential rebound, accumulating between RM0.790-RM0.800 may offer an optimal entry point. Setting a take-profit target at RM0.845 provides an upside potential of approximately 5.6%, while a stop-loss at RM0.755 limits downside risk to around 5.6%. This setup presents a balanced risk-reward profile, suitable for traders anticipating a technical recovery in MALAKOFF's price trajectory.

Source: Kenanga Research - 27 Nov 2024