KSL HOLDINGS BERHAD (Technical Buy)

• KSL closed 3.8% higher at RM1.09 yesterday, forming a symmetrical triangle chart pattern. As the price progresses towards the apex of the triangle, it is poised to either breach the upper trend line, indicating a breakout, or breach the lower trend line, leading to a breakdown. The convergence of both short-term and long-term (5 and 13-day) Simple Moving Averages (SMA) further points to an impending decisive movement.

• However, we believe that the probability of breaching the upper trend line is elevated, given the positive momentum observed under the MCDX's banker chip. Additionally, the ascending trajectories of both the Stochastic Oscillator and the Tom Demark Pressure Ratio (TDRP) suggest that there could be a resurgent in buying interest on the horizon.

• A clear break above the critical resistance level of RM1.12 could prompt the stock to challenge the next substantial resistance levels at RM1.17. On the other hand, a significant decline below the key support level of RM1.02 may initiate a downward trend.

• We suggest contemplating an entry into the stock at RM1.09 or close to its 13-day SMA, targeting a take-profit level at RM1.17, which presents a potential upside of approximately 7.3%. To mitigate risk, we recommend setting a stop-loss at RM1.02, corresponding to a potential downside of roughly 6.4%.

Source: Kenanga Research - 3 Nov 2023