V.S INDUSTRY BERHAD (Technical Buy)

• V.S. Industry Berhad (VS) closed at RM1.00 yesterday, marking a 2.04% gain as it attempts to recover from recent lows. The stock is currently trading near its 200-day SMA at RM0.974, indicating a potential stabilizing point after recent declines.
• From a technical perspective, the stochastic oscillator is emerging from oversold territory, currently at 10.88, indicating that a build-up of buying interest may be underway. The Tom Demark Pressure Ratio (TDRP) remains low at 37.63, suggesting selling pressure is beginning to ease. Meanwhile, the RSI has started to trend upwards, now at 44.97, signalling a possible shift from bearish to neutral sentiment. Additionally, the Smart MCDX indicator suggests that renewed buying interest is slowly building up, indicating potential upside momentum.
• Immediate resistance is seen at RM1.04, aligned with the 13-day SMA. A successful breakout above this level could see the stock testing the next resistance at RM1.08, coinciding with the 50-day SMA and 200-week SMA. On the downside, key support levels are RM0.97, corresponding with the 200-day SMA, and RM0.960, which could act as a solid floor against further declines.
• Investors looking for a recovery opportunity might consider accumulating near RM1.00, with a take-profit target set at RM1.05, offering an upside potential of approximately 5%. Setting a stop-loss at RM0.96 limits downside risk to around 4.0%. This setup presents a favorable risk-reward profile for traders seeking to capitalize on VSI's potential rebound.

Source: Kenanga Research - 10 Oct 2024