FAJARBARU BUILDER GROUP BERHAD (Technical Buy)

• Fajarbaru Builder Group Berhad (FAJAR) settled at RM0.370 last Friday, rising by 2.78%, as the stock rebounded off its immediate support at RM0.365, signalling early signs of a potential recovery. The price action reflects stabilisation near a critical support zone, coinciding with its 13-day SMA, while a narrowing trading range hints at possible accumulation. The convergence of the 5-day SMA at RM0.365 and the 13-day SMA at RM0.370 reinforces a key pivot zone that could determine near-term direction.
• From a technical perspective, the stochastic oscillator at 20.37 remains in oversold territory but is beginning to trend upwards, indicating a potential shift in momentum. The Tom Demark Pressure Ratio (TDRP) at 44.86 reflects easing selling pressure, fostering a conducive environment for a recovery. Meanwhile, the RSI at 44.80 is stabilising just below the neutral 50-mark, suggesting improving sentiment and the possibility of a reversal as momentum builds gradually.
• Key levels to watch include immediate resistance at RM0.370, aligned with the 13-day SMA. A decisive breakout above this level could propel the stock toward RM0.385, corresponding to its 50-day SMA, and further to RM0.405, near its 200-day SMA. On the downside, immediate support remains firm at RM0.365, with an additional buffer at RM0.355, offering stability against deeper pullbacks.
• Trading Strategy suggests accumulating the stock between RM0.365 and RM0.370 as an optimal entry point. Setting a take- profit target at RM0.395 provides an upside potential of approximately 6.8%, while a stop-loss at RM0.350 limits downside risk to around 4.1%. This set-up offers a favourable risk-reward profile for traders anticipating a rebound in FAJAR's price trajectory from current levels.

Source: Kenanga Research - 16 Dec 2024