PETRONAS DAGANGAN BHD (Technical Buy)

• Petronas Dagangan Bhd (PETDAG) closed at RM17.98 last Friday, marking a 0.77% decline as it continued to trade near recent lows. The stock has been consolidating between RM17.80 and RM18.30 over the past few days, showing signs of indecision as it trades near its 13-day SMA at RM18.04, which could act as a key resistance level in the near term.
• From a technical perspective, the stochastic oscillator is currently trending upwards at 17.56, suggesting that the stock is emerging from oversold territory, setting it up for a potential rebound. The Tom Demark Pressure Ratio (TDPR) has also increased to 43.88, indicating easing selling pressure and a potential shift towards bullish momentum. Meanwhile, the RSI is at 40.46, signalling neutral sentiment but with room for an upward move if momentum builds further.
• Looking forward, a decisive breakout above the immediate resistance at RM18.30 could drive the stock towards the next resistance levels at RM18.90 and RM20.00. Conversely, a drop below the recent low of RM17.68, which could serve as an immediate support level, may indicate a renewed downtrend.
• We recommend entering the stock at RM17.98 with a take-profit target set at RM18.90, offering a potential upside of about 5.1%. To manage risk, we suggest setting a stop-loss at RM17.25, limiting potential losses to approximately 4.1%.

Source: Kenanga Research - 14 Oct 2024