Technical Highlights

Last Friday, the stock surged and formed a large green candle at closing, breaking through an approximately 3-month long pennant pattern with considerable volume. Additionally, the recent swing had sent the share price to trade at higher highs and higher lows which formed a strong foundation for potential further uptick.

Strong momentum is confirmed by the RSI rising into the overbought territory, while short-term bullishness is supported by the recent golden cross shown by the MACD.

With the share price breaking through the pennant pattern, we think the stock could test the resistance at RM1.93 first and subsequently at RM2.24 (52-week high). Conversely, a dip below RM1.75 (a few points below the recent downswing) could signify the commencement of a correction phase.

Entry – RM-1.85 – RM1.86

Stop Loss – RM1.70

Target Price – RM1.93 – RM2.24

Source: Mercury Securities Research - 22 Jul 2024