SARAWAK OIL PALMS BHD (Technical Buy)

• Sarawak Oil Palms Bhd (SOP) closed at RM3.37 yesterday, up 1.20%. The formation of a 'three white soldiers' candlestick pattern, combined with a strong rebound from the 50-day SMA, signals a potential bullish trend reversal. With the stock holding firmly above its key SMAs (5, 50, and 200-day), it exhibits signs of strengthening momentum and potential for further upside.
• Technically, the stochastic oscillator at 39.52, is showing early signs of trending upward from oversold territory, signalling rising buying interest. The Tom Demark Pressure Ratio (TDPR) is stabilizing at 61.18, indicating diminishing selling pressure. Meanwhile, the RSI, which is climbing at 54.11, reflects neutral-to-positive momentum, leaving room for further gains if buying momentum continues to build.
• Looking ahead, immediate resistance is seen at RM3.38 (13-day SMA), followed by higher resistance levels at RM3.44 (23.6% Fibonacci retracement) and RM3.67 (recent high). On the downside, immediate support lies at RM3.30, aligning with 38.2% Fibonacci retracement, with further support at RM3.25 (5-day SMA) and RM3.20 (50-day SMA).
• We recommend accumulating near RM3.37, with a take-profit target at RM3.60, offering an upside potential of approximately 6.8%. To manage risk, a stop-loss should be set at RM3.15, limiting potential losses to around 6.5%.

Source: Kenanga Research - 28 Nov 2024