RAMSSOL GROUP BERHAD (Technical Buy)

• Yesterday, RAMSSOL broke below its consolidation phase, briefly testing its key support at RM0.385, which aligns with its 200-day SMA, before rebounding strongly to close at RM0.405. This strong close formed a 'Bullish Hammer' pattern, suggesting the stock may have reached its bottom and could be ready for a trend reversal.

• Technically, the stock's Stochastic Oscillator has been in the oversold zone since late October, indicating a potential rebound. The Tom Demark Pressure Ratio (TDRP), meanwhile, has been rising since early November, hinting at growing buying momentum. These indicators collectively enhance the likelihood of an upward trend for the stock.

• A firm break above the short-term (5-day) SMA of RM0.415 could see the stock aiming for resistance levels at RM0.425 and RM0.450. However, falling below the crucial 200-day SMA support of RM0.385 might initiate a downward trend, with significant support at RM0.360 and then RM0.320.

• We suggest entering the stock at around RM0.405, targeting a take-profit at RM0.440 for an estimated 8.6% upside. A stoploss at RM0.380 is recommended for risk control, capping potential losses at around 6.2%.

Source: Kenanga Research - 28 Nov 2023