Technical Highlights

Today, the share price surged and pushed the stock to trade above all of its EMA lines. A Marubozu candle was formed at closing with considerable trading volume (9.6x higher than its 90-day trading volume). The share price is on the verge of breaking through the neckline (at RM1.025) of an approximately 5-month long double- bottom pattern. We think the breakout is underway, especially with the growing momentum (RSI is growing with the line pointing upward).

Upward momentum is confirmed with the golden cross happened on the MACD today, while the short-term bullishness is affirmative with the 20-EMA line pointing upward straight.

If the share price breaks through the neckline of the double-bottom pattern, we think the stock could potentially test the resistance at RM1.245 first and subsequently at RM1.465 (derived by the difference of RM0.220 between the high and low of the double-bottom pattern). Conversely, consolidation happens if the share price dips below the RM0.910 support (a few ticks below the recent downswing).

Entry – RM-1.020 – RM1.050

Stop Loss – RM0.900

Target Price – RM1.245 – RM1.465

Source: Mercury Securities Research - 16 Jul 2024