Technical Highlights

The stock appeared to be consolidating from its 52-week high. The consolidation seemed to have ended until a large green candle emerged at yesterday’s closing, following a significant surge in the share price with substantial volume (5.5 times higher than its average 90-day trading volume). The formation of the green candle at closing, breaking through an approximately 3-month-long pennant pattern with increasing momentum (RSI is rising), indicates the potential for further upside in Optimax's share price.

Yesterday, the MACD exhibited a golden cross, which denotes strong momentum going forward. Additionally, the upward-pointing 20-EMA line confirms its short-term bullishness.

Given the pattern break-out with momentum, we think the share could test the 52- week high resistance at RM0.730 first and subsequently at 0.765 resistance. Conversely, consolidation starts if the share price dips below the RM0.680 support.

Entry – RM-0.715 – RM0.720

Stop Loss – RM0.675

Target Price – RM0.730 – RM0.767

Source: Mercury Securities Research - 1 Aug 2024