NAIM HOLDINGS BERHAD (Technical Buy)

• Naim Holdings Bhd (NAIM) settled at RM1.09 yesterday, advancing 0.93%, as the stock consolidated near its immediate support level of RM1.11. The recent price consolidation reflects a stabilisation phase within a narrow range, suggesting potential accumulation at current levels. This price action, combined with improving technical indicators, hints at a possible recovery in the near term.
• The stochastic oscillator at 31.20 is trending higher, emerging from the oversold territory and signalling strengthening momentum. The Tom Demark Pressure Ratio (TDRP) at 44.16 reflects a stabilising selling pressure, creating an environment conducive to a rebound. Meanwhile, the RSI at 46.21 is gradually rising towards the neutral 50-mark, with a bullish divergence observed, reinforcing an improving sentiment and recovery potential.
• Immediate resistance is marked at RM1.11, aligning with the 61.8% Fibonacci retracement level. A breakout above this level could propel the stock towards RM1.16, coinciding with the 200-day SMA, and further to RM1.21, representing the 50.0% Fibonacci retracement. On the downside, immediate support is observed at RM1.06, with an additional cushion at RM1.00, offering strong buffers against deeper pullbacks.
• For traders seeking to capitalise on NAIM's recovery potential, accumulating the stock at RM1.08-RM1.10 may present an optimal entry point. Setting a take-profit target at RM1.19 offers an upside potential of approximately 9.2%, while a stop-loss at RM0.995 limits downside risk to around 8.7%. This set-up provides a balanced risk-reward profile, appealing to traders anticipating a rebound in NAIM's price trajectory.

Source: Kenanga Research - 11 Dec 2024