SIME DARBY PROPERTY BERHAD (Technical Buy)

• SIMEPROP’s share price recorded a 1.65% increase, closing at RM0.625 yesterday, aligned with its short-term 5-day Simple Moving Averages (SMA) and its trend line. While there was a modest uptick in share price, the stock's trading volume has improved by 75% to 35m shares, indicating a gradual build-up of buying momentum.

• From the technical perspective, the stock’s oversold Stochastic Oscillator and the Tom Demark Pressure Ratio are also showing early sign of an upward trend, suggesting that there could be a resurgence in buying interest on the horizon. Additionally, the positive momentum observed under the MCDX’s banker chip, further reinforced the bullish outlook ahead.

• A decisive breach above the crucial resistance level of RM0.640 could potentially propel the stock to challenge the subsequent substantial resistance levels at RM0.675. Conversely, a notable drop below the pivotal support level of RM0.590 might initiate a downward trend.

• We propose considering an entry point into the stock at RM0.625, or near its 13-day SMA, with a target take-profit level at RM0.670, offering a potential upside of approximately 7.2%. To manage risk, we recommend implementing a stop-loss at RM0.585, which corresponds to a potential downside of roughly 6.4%.

Source: Kenanga Research - 7 Nov 2023