Technical Highlights

Magnum’s share price had been hovering above all its EMA lines for the past 2 weeks. Today, its share price jumped, forming a large green candle at closing and broke through a roughly 3-month long pennant pattern with significant trading volume (10.4 times higher than its 90-day average trading volume). This suggests that there may be more potential for an upward trend.

Strong momentum is observed as the RSI enters overbought territory today. Additionally, short-term bullishness is confirmed with the 20-EMA line pointing upward.

We think the stock could test the resistance at RM1.31 first and subsequently at RM1.41 (with reference to the difference of RM0.10 between the high and low of the pennant pattern). Conversely, a dip below RM1.17 (a few points below the recent downswing) could signal the start of a correction phase.

Entry – RM-1.27 – RM1.28

Stop Loss – RM1.16

Target Price – RM1.31 – RM1.41

Source: Mercury Securities Research - 18 Jul 2024