MISC BERHAD (Technical Buy)

• MISC Berhad (MISC) closed at RM7.51 last Friday, rising by 1.49%, as the stock continued to stabilise following a rebound from its immediate support level at RM7.23. The price action reflects early signs of recovery, with the stock consolidating above the critical RM7.40 level, suggesting potential accumulation. The confluence of the 5-day SMA at RM7.44 and the 13- day SMA at RM7.50 further highlights a pivotal zone that could determine near-term direction.
• From a technical perspective, the stochastic oscillator at 29.69 has started to trend higher, moving out of oversold territory and signalling improving upward momentum. The Tom Demark Pressure Ratio (TDRP) at 27.00 indicates diminishing selling pressure, which creates a conducive environment for further gains. Meanwhile, the RSI at 38.89 is attempting to stabilise, showing gradual improvement toward the neutral 50-mark, reflecting an early bullish reversal.
• Key levels to monitor include immediate resistance at RM7.61, which aligns with the 50-day SMA. A successful breakout above this level could drive the stock towards RM7.84 and RM8.05, corresponding to the 200-day SMA. On the downside, immediate support is firm at RM7.44, with an additional cushion at RM7.23 and RM7.00, providing strong buffers against further declines.
• Trading Strategy suggests accumulating the stock at RM7.45-RM7.51 for an optimal entry point. A take-profit target at RM7.98 offers an upside potential of approximately 6.3%, while a stop-loss at RM7.19 limits downside risk to around 4.3%. This setup presents a favourable risk-reward profile, appealing to traders anticipating a sustained recovery in MISC's price trajectory.

Source: Kenanga Research - 16 Dec 2024