Technical Highlights

The recent upswing, coupled with the formation of a double large green candle, had led SKB’s share price to hover above all of its EMA lines for the past three weeks. Yesterday, the share price surged, forming a large green candle at the closing and breaking through the approximately three-week-long flag pattern with up-ticking momentum (RSI>70) and considerable trading volume (5.1 times more than its average 90-day trading volume). These positive indicators suggest that there may be more potential upside for the stock.

MACD shows momentum is strengthening with the MACD line crossing above the signal line recently. Similarly, short-term bullishness is further affirmed by the RSI hooking up.

With the flag pattern breaking out with positive momentum, we think the share could test the RM1.135 resistance (new all-time high) and subsequent RM1.220 resistance (derived based on the difference of RM0.085 of the high and low of the flag pattern). Conversely, consolidation starts if the share price dips below the RM0.520 support.

Entry – RM-1.130 – RM1.135

Stop Loss – RM0.515

Target Price – RM1.135 – RM1.220

Source: Mercury Securities Research - 25 Jul 2024