Nationgate Holdings Bhd (NATGATE, 0270)

• Share price has rose steadily since our last technical buy call in Dec last year.

• NATGATE may extend it upward trajectory after breaking out from its one-month rectangularpattern yesterday. In view of the stock bouncing off the 20-day EMA with a second consecutive white candle, supported by positive technical reading in RSI, this bullish momentum appears to be picking up.

• We expect the rising momentum to steer the stock higher and test the next level of resistance ofRM1.77 (R1) followed by RM1.85 (R2) in the near term.

• On the downside, stop-loss is set at RM1.46, below the 50 days EMA.

• Fundamentally, we like NATGATE due to its exposure to the fast-growing industrial and commercialproducts used within the networking and telecommunication sectors. The company's expertise in manufacturing optical transceivers will benefit from the increasing demand for high-speed data transmission, driven by AI applications. Furthermore, NATGATE's recent venture as an OEM for Nvidia-powered AI servers underscores its strategic alignment with emerging technological trends, enhancing its growth potential.
  

Source: Rakuten Research - 24 Apr 2024

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