Date: October 11, 2024
Broker: CGS International
Overview of Muhibbah Engineering
Muhibbah Engineering (M) Bhd is a Malaysian-based investment holding company involved in various sectors, including civil, marine, and structural engineering contract works. Through its subsidiaries, the company also manufactures engineering products, distributes construction materials, builds and repairs ships, produces and leases cranes, and trades in computer hardware. Additionally, Muhibbah invests in properties, expanding its portfolio across multiple industries.
Recent Stock Performance
As of the report date, October 11, 2024, Muhibbah Engineering’s stock price stood at RM0.925. The stock showed strong upward momentum, closing at a two-month high, which is a bullish signal for further growth potential.
Technical Buy Recommendation
CGS International recommends a Technical Buy for Muhibbah Engineering. The stock recently surged, breaking out of a downtrend, underpinned by a long white candle and closing above key exponential moving averages (EMAs). This indicates a bullish shift in momentum.
- Entry Price Range: RM0.90 to RM0.925
- Stop Loss Level: RM0.83
- Target Price 1: RM0.96
- Target Price 2: RM1.03
Key Technical Indicators
Several positive technical indicators support the stock’s continued upward trajectory:
- Breakout from Downtrend: The stock recently broke out of a downtrend line originating from the RM1.10 high, accompanied by increased trading volumes.
- Higher High and Higher Low Sequence: The sequence of higher highs and higher lows from the RM0.765 low suggests further upside potential.
- MACD and RSI Indicators: Both the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) have hooked upwards again, indicating a renewed bullish momentum in the market.
Trading Strategy
The report suggests that aggressive traders consider taking long positions in Muhibbah Engineering, either at current prices or on potential weakness. A stop-loss should be placed at RM0.83, just below the last swing low, to mitigate risk. This approach is recommended for those looking to capitalize on the ongoing bullish sentiment in the stock.
Upside Potential
With support from both technical indicators and price movements, the stock has the potential to test its historical resistance levels at RM0.96 and RM1.03. These targets are achievable if the stock maintains its current upward trajectory, making it an attractive option for short-term gains.
Conclusion
Muhibbah Engineering is well-positioned for further upside, supported by a strong technical breakout and positive market momentum. For traders seeking opportunities in the engineering sector, this stock presents a compelling case for potential short-term growth, with a well-defined entry point, stop-loss, and upside targets.
