SMRT HOLDINGS BHD (Technical Buy)

• SMRT Holdings Bhd (SMRT) closed at RM1.14 yesterday, gaining 0.88%. The stock has been consolidating near its 50-day SMA over the past few trading sessions, indicating the formation of a solid foundation. Its sustained testing of the 13-day SMA at RM1.14 highlights persistent buying interest as the stock positions itself for a potential breakout above this key level.
• From a technical perspective, the stochastic oscillator is recovering at 42.42, indicating early signs of buying momentum. Meanwhile, the Tom Demark Pressure Ratio (TDPR) stabilising at 44.21, reflects reducing selling pressure. Additionally, the RSI at 51.12 shows neutral-to-positive momentum, suggesting room for further upward movement as momentum builds.
• Looking ahead, immediate resistance is seen at RM1.14 (13-day SMA), followed by RM1.17 (50% Fibonacci retracement) and RM1.23 (38.2% Fibonacci retracement). On the downside, key support levels are at RM1.12 (5 and 50-day SMAs), RM1.09 (lower boundary of recent consolidation phase) and RM1.04 (200-day SMA).
• We recommend entering the stock near RM1.14, targeting a take-profit level at RM1.22, which presents an upside potential of around 7.0%. To manage risk, a stop-loss should be placed at RM1.08, limiting potential losses to about 5.3%.

Source: Kenanga Research - 5 Dec 2024