Technical Highlights

A 3-month-long rectangle break-out is seen, backed by growing momentum (RSI is pointing up towards the overbought region), suggesting that strong buying interest continues. The stock is trading at RM0.495 and is close to breaking through the crucial RM0.50 (the 52-week high). We think breakout is underway, especially with the growing momentum (RSI is growing).

The MACD line has recently crossed above the signal line, which shows a strong bullish signal going forward. The 20-EMA pointing up also signifies a short-term bullish trend.

If it breaks through the RM0.50 level, we think the stock could potentially test the next RM0.550 resistance (based on the difference of recent high price and low price). Conversely, a drop below RM0.45 support could signal the start of a correction phase.

Entry – RM-0.500 – RM0.505

Stop Loss – RM0.445

Target Price – RM0.505 – RM0.550

Source: Mercury Securities Research - 11 Jul 2024