JCY INTERNATIONAL BERHAD (Technical Buy)

• JCY International Berhad (JCY) closed at RM0.455 yesterday, marking a substantial 9.64% gain as it broke out above its 5- day SMA line. After a long downtrend, the stock seems to be stabilizing near the 61.8% Fibonacci retracement level of RM0.430, coinciding with its crucial 200-day SMA level. This suggests a solid support level may have been established at these price points.
• Technically, the stochastic oscillator has moved up slightly from oversold levels, now at 11.57, which could indicate the beginning of renewed buying interest. The Tom Demark Pressure Ratio (TDRP) remains stable at 41.56, signalling diminishing selling pressure. Meanwhile, the RSI has recovered to 37.34, suggesting that a short-term rebound may be on the horizon. On the weekly chart, the stochastic indicator has dipped into oversold territory, and the Smart MCDX is beginning to trend upward, further reinforcing the idea of increased buying interest.
• Immediate resistance is located at RM0.470, aligned with the 13-day SMA. A breakout above this could see the stock moving toward RM0.525, which coincides with the 50% Fibonacci retracement level and the 50-day SMA resistance. On the downside, key support is at RM0.430, with the next critical level at RM0.425, where the 200-day SMA provides a firm base against further declines.
• For traders eyeing a recovery play, accumulating near the 5-day SMA at the RM0.435-RM0.455 range offers a strategic entry point. A take-profit target of RM0.510 offers an upside potential of approximately 12% to 17%, while a stop-loss set at RM0.420 minimizes downside risk to 3.4% to 7.7%. This risk-reward profile is favorable for those looking to capitalize on JCY's potential rebound.

Source: Kenanga Research - 9 Oct 2024