RGB INTERNATIONAL BERHAD (Technical Buy)

• RGB International Berhad (RGB) closed at RM0.380 yesterday, marking a 2.56% decline as the stock consolidates around key support levels. The price action reflects a period of consolidation, potentially forming a base for a possible reversal if buying interest emerges at current levels. The convergence of the 13, 50, and 200-day SMAs suggests that a decisive move may be on the horizon, with upside potential if bullish momentum builds.
• From a technical perspective, the stochastic oscillator is currently at 34.34, rising from lower levels and indicating a gradual increase in buying momentum as the stock exits oversold conditions. The Tom Demark Pressure Ratio (TDPR) stands at 37.22, signalling reduced selling pressure, which could provide a conducive environment for a potential rebound. Additionally, the RSI is trending slightly upward at 43.79, approaching the neutral 50 level, which signifies a recovery in momentum that could support further upside if sustained. A bullish divergence in the RSI adds to the optimism for a trend reversal, as the indicator moves higher while the price stabilises.
• Immediate resistance is observed at RM0.385, aligning with the 13-day SMA. A breakout above this level could lead to further gains, with RM0.420 as the next significant resistance zone, marked by previous price highs and the 200-day SMA. On the downside, support is located at RM0.365, providing a near-term cushion, with additional support around RM0.350 for added stability against pullbacks.
• For traders looking to capitalise on a potential reversal, accumulating around RM0.370-RM0.380 may offer a strategic entry point. A take-profit target at RM0.410 offers an upside potential of approximately 7.9%, while setting a stop-loss at RM0.355 limits downside risk to around 6.6%. This setup presents a balanced risk-reward ratio, allowing traders to take advantage of a potential shift in momentum if RGB's price action turns bullish.

Source: Kenanga Research - 8 Nov 2024