Kinergy Advancement Berhad (KAB) is showing some technical strength recently. Having traded  sideways for almost a month, KAB has finally broken out from the RM0.29 to RM0.34 band.

Daily chart

Updating from our last article on KAB in August 2024, the key support at RM0.29 remains intact while the key resistance of RM0.42 has yet to be tested. Yesterday’s close of RM0.355 with increased volume bodes well, as it signifies a clear breakout from the current month long consolidation range of RM0.29 to RM0.34.

If the price can maintain above the breakout zone for the next 3 trading days, KAB should be attracting more trader interest and the key resistance of RM0.42 is likely to be tested in the medium term.

KEY FUNDAMENTALS OF KAB

- 1HFY24 revenue and net profit up 256% and 78% year-on-year, respectively. Based on the company’s press release on the results, KAB is upbeat on the company’s prospects going forward with its transformation from an engineering solutions provider to being a one stop sustainable energy solutions provider.

- With more emphasis on sustainability, it is safe to say that this trend is here to stay. Expect more incentives and initiatives from the government in the upcoming budget and beyond to spur more growth in the sector. We think KAB represents a good proxy to capture any upside rally in this sector.

- There has been some insider selling from one of its substantial shareholder recently. However, the positive takeaway is that the price has always rebounded after any heavy selling. In recent filings, it was disclosed that Kington Tong had disposed nearly 6.5 million shares on 20 Sept 2024 and caused a day low price of RM0.305. That turned out to be the recent swing low in price, implying that investors are viewing that any unexpected selling in price is viewed as a buying opportunity.

CONCLUSION

We remain bullish on KAB as a proxy to the renewable energy sector. Based on technicals, we strongly believe the uptrend is intact and will ride it as long as the RM0.29 support level is not violated.

Disclaimer: This blog is created for sharing of trading ideas only. It is not in any way or form meant to be an inducement or recommendation to buy or sell any stocks. Consult your financial consultant before making any financial investments.