Resintech Bhd (RESINTC, 7232)

• RESINTC may trend higher after it surged to a new 52-week high yesterday. With the stock posting 4 consecutive white candles coupled with its 20-day EMA starting to turn up, the uptrend may continue in near term.

• We opine the rising momentum has a decent chance to kick start a new upcycle and lift the stock towards the subsequent level of resistance of RM0.62 (R1), followed by RM0.67 (R2).

• On the downside, stop-loss is set at RM0.52.

• Fundamentally, RESINTC is poised to benefit from the government's water infrastructure overhaul and the Sarawak theme. RESINTC involved in manufacturing uPVC and Polyethylene products, has signed an MOU with SEDC to establish a joint venture for algae plantation, expected to supply plastic pipes and tanks. This aligns with Sarawak's plan for sustainable aviation fuel production from microalgae starting in 2024, aiming for 100,000 barrels per day by 2030.

Source: Rakuten Research - 16 Jan 2024

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