Technical Highlights

The surge in trading volume yesterday was 11.4 times higher than its average 90- day, providing momentum for the stock to break out of the sideways movement over the past 2 months. A green candle was formed at closing, breaking through a 4- month-long pennant pattern with strong momentum (RSI>70). With the momentum still going strong, we believe the stock could continue moving upward towards a new all-time high.

Golden cross exhibited by the MACD yesterday confirms the growing momentum. Similarly, the upward-pointing 20-EMA line indicates short-term bullishness.

With these indicators showing positive signals, we think the stock could potentially test the resistance at RM1.010 (a new all-time high) first and subsequently at RM1.110 (derived based on the difference of RM0.095 between the high and low of the pennant pattern). Conversely, a drop below RM0.890 could indicate the commencement of a correction phase.

Entry – RM-0.980 – RM0.985

Stop Loss – RM0.885

Target Price – RM1.010 – RM1.065

Source: Mercury Securities Research - 2 Aug 2024