CREST BUILDER HOLDINGS BERHAD (Technical Buy)

• Crest Builder Holdings Bhd (CRESBLD) closed at RM0.680 yesterday, marking a 1.49% gain and confirming a breakout from its prior consolidation zone within a symmetrical triangle pattern. The breakout, accompanied by rising volume, indicates growing bullish momentum as the stock decisively clears key resistance levels and surpasses the upper boundary of the pattern.
• Technically, the stochastic oscillator is climbing at 45.83, reflecting increasing buying pressure in response to the breakout. The Tom Demark Pressure Ratio (TDRP) remains high at 84.84, signalling easing selling pressure. Meanwhile, the RSI has risen to 52.70, crossing the neutral 50-mark, which confirms the upward momentum and suggests further upside potential. These positive technical indicators are aligned with the breakout, underscoring a potential trend reversal in progress.
• Following the breakout, immediate resistance is seen at RM0.695, with subsequent targets at RM0.730 and RM0.760, in line with previous swing highs. Sustained buying interest could see the stock rally towards RM0.730 in the short term. On the downside, key support has shifted to RM0.675, the breakout level, followed by RM0.660 and RM0.650, offering firm support against potential retracements.
• Traders looking to capitalize on this breakout opportunity may consider accumulating between RM0.66 and RM0.68. A take- profit target at RM0.725 offers an upside potential of approximately 6.6%, while setting a stop-loss at RM0.645 limits downside risk to 5.1%. This setup provides a favourable risk-reward ratio, allowing traders to benefit from the confirmed bullish momentum in CRESBLD's price action.

Source: Kenanga Research - 24 Oct 2024