GENTING PLANTATIONS BERHAD (Technical Buy)

• Genting Plantations Berhad (GENP) closed at RM5.36 last Friday, gaining 0.56%. After a period of weakness, the stock seems to be stabilizing, establishing a base around the RM5.21-RM5.35 range, and is showing early signs of recovery. It is currently trading close to its 5-day SMA of RM5.36, with potential to test higher levels in the near term. The weekly chart mirrors this technical setup, indicating a potential rebound in the coming days.
• On the technical front, the stochastic oscillator has moved upward from oversold levels, standing at 31.48, signalling growing buying momentum. The Tom Demark Pressure Ratio (TDRP) holds steady at 33.56, reflecting diminishing selling pressure. The RSI is also trending upward from 40.68, further supporting the case for a recovery.
• Key resistance levels include RM5.40, which aligns with the 78.6% Fibonacci retracement level, followed by RM5.51, coinciding with the 50-day SMA. A breakout above these levels could propel the stock towards RM5.68 (13-week SMA) and RM5.91, where the 200-day SMA is positioned. On the downside, immediate support is found at RM5.21, followed by RM5.12, which could act as a key level to prevent further declines.
• For investors looking to capitalize on GENP's potential recovery, accumulating the stock around RM5.30-RM5.36 could be a strategic move. A take-profit target at RM5.65 offers an upside of approximately 5.4%, while placing a stop-loss at RM5.18 limits downside risk to around 3.3%. This strategy provides an attractive risk-reward profile for traders seeking to benefit from GENP's near-term rebound.

Source: Kenanga Research - 7 Oct 2024