POWERWELL HOLDINGS BHD (Technical Buy)

• Powerwell Holdings Bhd (PWRWELL) ended at RM0.415 yesterday, gaining 1.22%. It closed firmly above all its key SMAs - the 5-day, 13-day, 50-day and 200-day - which are converging, suggesting a potential breakout from its current consolidation phase, with the 200-day SMA serving as its critical support level.
• Technically, the stochastic oscillator stands at 60.32, indicating increasing buying interest. The Tom Demark Pressure Ratio (TDRP) is neutral at 45.5, reflecting an easing selling pressure. Meanwhile, the RSI is rising at 54.30, reinforcing the stock's growing momentum and hinting at potential further upside.
• Looking ahead, a decisive breakout above the immediate resistance at RM0.425, coinciding with the 38.2% Fibonacci retracement level, could nudge the stock towards the next resistance at RM0.445. Conversely, a decline below the lower boundary of the ongoing consolidation range at RM0.395 may initiate a downward trend.
• We recommend making an entry at RM0.415, with a take-profit target of RM0.440, offering an upside potential of about 6.0%. To manage risk, a stop-loss should be placed at RM0.390, limiting potential losses to approximately 6.0%.

Source: Kenanga Research - 24 Oct 2024