Technical Highlights

The recent uptrend had sent the share price of Pharmaniaga to trade above all its EMA lines. A Marubozu candle was formed at the closing after the share price surged yesterday. The Marubozu candle broke through the neckline of the double bottom pattern at RM0.445 with considerable trading volume (5.9x higher than its average 90-day total trading volume) and solid momentum (RSI >70), signaling that more upswing may be on the cards.

RSI has been in the overbought territory for the past week, showing growing momentum and indicating a bullish short-term trend ahead.

We think the stock could test the resistance at RM0.495 (52-week high) first and subsequently at RM0.550. Conversely, a fall below RM0.43 (a few points below the recent downswing) could mark the start of a correction phase.

Entry – RM-0.470 – RM0.475

Stop Loss – RM0.425

Target Price – RM0.495 – RM0.550

Source: Mercury Securities Research - 19 Jul 2024