DAYANG ENTERPRISE HOLDINGS BERHAD (Technical Buy)

• Dayang Enterprise Holdings Bhd (DAYANG) closed at RM2.41 yesterday, posting a modest gain of 0.84% and holding firm above its 200-day SMA (currently at RM2.40). The stock is consolidating after rebounding from its recent low of RM2.02, indicating signs of stabilization around its 5 and 13-day SMA at around RM2.34 and the 50% Fibonacci retracement level of RM2.26. This suggests the stock could be forming a base, with potential for a breakout in the near term.
• From a technical perspective, the stochastic oscillator continues to rise, signalling sustained buying interest, though it has yet to reach overbought levels. On the weekly chart, the stochastic oscillator at 33.3 shows an early rebound from oversold territory. Additionally, the Tom Demark Pressure Ratio (TDRP) is stable at 59.23, further suggesting that selling pressure is diminishing. The RSI, currently at 47.89, is trending upward, reinforcing the positive momentum building in the stock.
• Key resistance levels to watch include RM2.44, which aligns with the 61.8% Fibonacci retracement level and the 50-day SMA. A decisive break above this could open the path towards RM2.58, followed by RM2.73. On the downside, support levels are established at RM2.34, coinciding with the 13-day SMA, and RM2.26, aligned with the 50% Fibonacci retracement level. These levels should provide a solid buffer against any potential pullbacks.
• For traders seeking to capitalize on a continued recovery, accumulating near RM2.40 could provide an attractive entry point. A take-profit target at RM2.58 offers a potential upside of approximately 7.1%, while setting a stop-loss at RM2.25 limits downside risk to about 6.3%. This setup provides a balanced risk-reward ratio for those looking to benefit from DAYANG's potential upward movement.

Source: Kenanga Research - 14 Oct 2024