RANHILL UTILITIES BHD (Technical Buy)

• Ranhill Utilities Bhd (RANHILL) closed at RM1.46 last Friday, up 1.39%. The formation of an "inverted hammer" candlestick pattern on its daily chart signals a potential bullish reversal, while its sustained position above all key SMAs (5-, 13-, 50-, and 200-day) reinforces upward momentum and highlights strong support as it builds towards higher levels.
• From a technical standpoint, the stochastic oscillator is trending higher at 62.44, indicating increasing buying interest. Meanwhile, the Tom Demark Pressure Ratio (TDPR) rising at 81.84 suggests easing selling pressure, further supporting the bullish sentiment. The RSI, currently at 63.49, reflects positive momentum and additional room for further upside.
• Looking ahead, immediate resistance is identified at its intraday high of RM1.54, with the next resistance observed at RM1.57 (23.6% Fibonacci retracement). On the downside, immediate support lies at RM1.43 (13-day SMA), followed by RM1.41 (5- day SMA) and 1.37 (50% Fibonacci retracement), providing a buffer against potential pullbacks.
• We recommend entering the stock near RM1.46, with a take-profit target set at RM1.56, representing an upside potential of approximately 6.8%. To mitigate risk, a stop-loss should be placed at RM1.36, limiting potential losses to around 6.8%.

Source: Kenanga Research - 23 Dec 2024