UNIQUE FIRE HOLDINGS BERHAD (Technical Buy)

• Unique Fire Holdings Berhad (UNIQUE) closed at RM0.360 yesterday, maintaining its position as it consolidates near recent lows. The stock remains within a consolidation phase, suggested that it may be gearing up for a potential trend reversal if buying interest builds. The convergence of key SMAs namely 5-day, 13-day, and 50-day at the current level supports the potential for a decisive movement is in the horizon.
• Technically, the stochastic oscillator is at 18.94, close to oversold territory, suggesting that the stock could attract fresh buying interest as it attempts to recover. The Tom Demark Pressure Ratio (TDPR) is at 48.60, showing that selling pressure is gradually diminishing, which supports the potential for a rebound. The RSI is trending at 51.81, just above the neutral 50- mark, reflecting improving momentum and indicating a possible shift towards bullish sentiment.
• Immediate resistance is located at RM0.375, corresponding to the 38.2% Fibonacci retracement level, followed by RM0.405. A breakout above these levels could open the path for a move towards RM0.455, a significant resistance area. On the downside, support lies at RM0.345, near the 50% Fibonacci retracement level, with further support at RM0.33, which aligns with the 200- day SMA, providing a cushion against potential pullbacks.
• For traders aiming to capitalise on the potential rebound, accumulating between RM0.35 and RM0.36 may present an attractive entry point. A take-profit target at RM0.395 offers an upside potential of approximately 9.75%, while placing a stop-loss at RM0.340 limits downside risk to around 5.6%. This setup offers a favourable risk-reward ratio, suitable for traders looking to take advantage of UNIQUE's potential reversal.

Source: Kenanga Research - 5 Nov 2024