HUP SENG INDUSTRIES BHD (Technical Buy)

• Hup Seng Industries Bhd (HUPSENG) closed at RM1.20 last Friday, declining marginally by 0.83%. The stock has recently rebounded from its 50-day SMA (RM1.17) while testing the immediate resistance of RM1.21 (13-day SMA), suggesting potential for a breakout and renewed bullish momentum.
• Technically, the stochastic oscillator is showing early signs of trending upwards at 34.82, indicating the stock is emerging from oversold levels and suggesting rising buying momentum. The Tom Demark Pressure Ratio (TDPR) stabilizing at 71.52 reflects diminishing selling pressure, which supports the likelihood of further upward movement. Additionally, the RSI at 51.45 also points to neutral-to-positive sentiment with room for additional gains.
• Immediate resistance is identified at RM1.21 (13-day SMA), followed by additional resistance levels at recent highs of RM1.29 and RM1.33. On the downside, immediate support is seen at RM1.18 (5-day SMA), with further support at RM1.15 (38.2% Fibonacci retracement), providing a cushion against declines.
• We recommend entering the stock near RM1.20, targeting a take-profit level at RM1.28, which offers an upside potential of approximately 6.7%. To manage risk, a stop-loss should be placed at RM1.14, limiting potential losses to around 5.0%.

Source: Kenanga Research - 23 Dec 2024