SEALINK INTERNATIONAL BERHAD (Technical Buy)

• Sealink International Berhad (SEALINK) was previously recommended as a technical buy on 21 November, targeting a price of RM0.305 (+10.9% upside). The stock has since reached a high of RM0.340 before moderating, closing at RM0.305 yesterday. This retracement brings the price near its 50-day SMA key support level, presenting another potential trading opportunity. The recent pullback, within the bounds of an ascending trend line, reflects a healthy consolidation and signals the potential for bullish momentum to resume if buying interest persists. The alignment of the 200-day SMA at RM0.275 and the 50-day SMA at RM0.305 further underpins the stock's positive outlook.
• From a technical standpoint, the stochastic oscillator remains elevated at 68.77, indicating strong upward momentum while allowing for minor consolidation. The Tom Demark Pressure Ratio (TDPR) at 63.96 confirms sustained buying pressure, reinforcing the bullish sentiment. Additionally, the RSI at 45.68 demonstrates improving momentum, supported by a bullish divergence that enhances confidence in a continued upward trajectory.
• Immediate resistance is identified at RM0.320, with a breakout likely to drive the stock toward RM0.340 and potentially RM0.360, marking critical resistance zones. On the downside, immediate support lies at RM0.295, coinciding with the 13-day SMA, while stronger support at RM0.285 offers additional stability against further retracement.
• For traders seeking to leverage SEALINK's bullish technical setup, accumulation between RM0.300-RM0.305 may provide an optimal entry. A take-profit target at RM0.340 offers an upside potential of approximately 11.5%, while a stop-loss at RM0.275 limits downside risk to 10%. This setup presents a compelling risk-reward profile, well-suited for traders anticipating a continuation of SEALINK's upward momentum.

Source: Kenanga Research - 27 Nov 2024