SKB SHUTTERS CORPORATION BERHAD (Technical Buy)

• SKBSHUT experienced a pullback starting November 21, followed by a four-day consolidation in the RM0.575-RM0.605 range. The closing price of RM0.605 yesterday, aligning with the 50% Fibonacci retracement level and accompanied by rising volume, indicates potential renewed buying interest.

• Technically, the stock's Stochastic Oscillator has moved into oversold territory, showing early signs of a reversal. Additionally, the Tom Demark Pressure Ratio (TDRP) is slightly above the 50-level and trending upward, suggesting diminishing selling pressure. The MCDX’s banker chip's improvement also supports the prospect of increasing buying momentum.

• A decisive break above the immediate resistance of RM0.605 could lead SKBSHUT to target higher resistance levels at RM0.625 and RM0.655. Conversely, a drop below the recent consolidation's lower boundary of RM0.575 might signal a downward trend.

• We recommend entering the stock at RM0.605, aiming for a take-profit at RM0.650, near the 13-day SMA level, which offers a potential upside of about 7.4%. For risk management, setting a stop-loss at RM0.570 is advised, limiting the potential downside to approximately 5.8%.

Source: Kenanga Research - 6 Dec 2023