LOTTE CHEMICAL TITAN HOLDING BERHAD (Technical Buy)

• Lotte Chemical Titan Holding Berhad (LCTITAN) closed at RM0.690 yesterday, rising by 2.22%, as the stock demonstrated early signs of recovery following an extended downtrend. The price action reflects accumulation near its immediate support at RM0.650, with increasing trading volume supporting the potential for a rebound. The 5-day SMA at RM0.695 aligns closely with the current price, indicating a key pivot point for near-term direction.
• From a technical perspective, the stochastic oscillator at 6.77 is moving higher from deeply oversold territory, signalling the possibility of a technical rebound. The Tom Demark Pressure Ratio (TDPR) at 22.20 reflects easing selling pressure, fostering a more favourable environment for recovery. Meanwhile, the RSI at 20.92 remains oversold, with a bullish divergence forming as the RSI trends higher despite recent price weakness, reinforcing the potential for a turnaround.
• Immediate resistance is observed at RM0.695, with a breakout above this level potentially driving the stock toward RM0.765 and RM0.850, marking significant resistance zones. On the downside, immediate support is firm at RM0.650, with an additional buffer at RM0.620, providing stability against further declines.
• For traders looking to leverage LCTITAN's recovery potential, accumulating the stock between RM0.680-RM0.690 may present an optimal entry point. Setting a take-profit target at RM0.750 offers an upside potential of approximately 8.7%, while a stop-loss at RM0.640 limits downside risk to around 7.2%. This setup delivers a balanced risk-reward profile, appealing to traders anticipating a rebound in LCTITAN's price trajectory.

Source: Kenanga Research - 9 Dec 2024