EKOVEST BERHAD (Technical Buy)

• Ekovest Bhd (EKOVEST) closed unchanged at RM0.375 last Friday, reflecting a period of consolidation as the stock traded near the convergence of its 5-day and 13-day SMAs. The stock is showing signs of a potential trend reversal, highlighted by a breakout from its downtrend line visible in the chart.
• The stochastic oscillator stands at 61.36, indicating a steady rise in buying momentum. At the same time, the Tom Demark Pressure Ratio (TDRP) remains stable at 60.08, signalling a reduction in selling pressure. Additionally, the RSI is trending upwards at 49.45, moving towards neutral levels, which could be a precursor to a bullish reversal. The weekly chart also shows a similar setup, reinforcing the potential for an uptrend reversal.
• Immediate resistance lies at RM0.385, and a breakout above this level could signal further upside, with the next target set at RM0.425. On the downside, support is at RM0.36, which is expected to provide strong protection against potential declines.
• For traders seeking to take advantage of this possible reversal, accumulating the stock at current levels presents an attractive opportunity. With a take-profit target of RM0.415, the trade offers an upside potential of around 10.7%. A stop-loss at RM0.350 would limit downside risk to approximately 6.7%, providing a well-balanced risk-reward scenario for short-term investors.

Source: Kenanga Research - 14 Oct 2024