Technical Highlights

The stock has shown a consistent pattern of higher highs and higher lows after a period of consolidation over the past 2 months from its 52-week high. Additionally, the share price's decline over the past week has remained above the breakout point of the 6-week-long pennant pattern, indicating the significance of this breakout. Last Friday, a Marubozu candle formed after the share price surged with increasing momentum, as evidenced by the growing RSI indicator. Considering these positive indicators, it appears that there may be further upside potential ahead.

Momentum is confirmed by the growing RSI indicator, while bullish sentiment is boosted by the upward-pointing EMA 20 and MACD line.

With these stated positive signals, we think the stock could potentially test the resistance at RM0.245 (52-week high) first and subsequently at RM0.257. On the other hand, a dip below RM0.210 could signal the start of a correction phase.

Entry – RM-0.235 – RM0.240

Stop Loss – RM0.205

Target Price – RM0.245 – RM0.257

Source: Mercury Securities Research - 29 Jul 2024