Technical Highlights

After consolidating from its 52-week high since late April, Batemek's share price showed signs of a reversal when a large green candle formed yesterday, causing the stock to trade above all its EMA lines. The green candle also broke through a 13- week-long pennant pattern with significant trading volume (15.6x higher than its average 90-day trading volume) and strong momentum (RSI just entered overbought territory today). With the momentum still going strong, we believe the stock could continue moving upward towards its 52-week high.

Momentum is growing, as evident by yesterday's golden cross in the MACD. Likewise, the upward-pointing EMA 20 line indicates short-term bullishness.

With these indicators showing positive signals, we think the stock could potentially test the resistance at RM0.475 (52-week high) first and subsequently at RM0.500. Conversely, a dip below RM0.410 could signify the start of a correction phase.

Entry – RM-0.455 – RM0.460

Stop Loss – RM0.405

Target Price – RM0.476 – RM0.500

Source: Mercury Securities Research - 1 Aug 2024