NOTION VTEC BERHAD (Technical Buy)

• Notion VTEC Berhad (NOTION) closed at RM0.950 yesterday, gaining 4.4% as the stock shows signs of stabilizing after its recent sharp decline. The consolidation around the RM0.890 support level suggests that the stock might have found a short- term base, offering a potential entry point for traders.
• Technically, the stochastic oscillator is beginning to rise from oversold conditions, currently at 9.42, signalling early signs of renewed buying momentum. The Tom Demark Pressure Ratio (TDRP) stands at 45.84, indicating that selling pressure has eased considerably. Meanwhile, the RSI at 36.59 is starting to recover, pointing towards potential accumulation. The weekly chart further supports this bullish outlook, displaying similar signs of recovery, reinforcing the potential for a rebound.
• Key resistance lies at RM0.960, where the 200-day SMA acts as a crucial barrier. A successful break above this level could pave the way for the stock to test RM1.06, coinciding with the 13-day SMA, and potentially reach RM1.12, aligned with the 61.8% Fibonacci retracement level. On the downside, immediate support is at RM0.890, with the next critical level at RM0.88, which aligns with the 50-week SMA.
• For traders looking to take advantage of the potential rebound, entering at RM0.950 presents an attractive opportunity. A take- profit target at RM1.05 offers a potential upside of approximately 10.5%, while a stop-loss at RM0.875 limits downside risk to around 7.9%. This setup provides a favorable risk-reward ratio, making it an appealing opportunity for those looking to capitalize on NOTION's recovery momentum..

Source: Kenanga Research - 8 Oct 2024