Technical Highlights

The stock had been experiencing consolidation from its 52-week high over the past 3 months. The sign of reversal emerged when the share price started to pick up recently with the pattern of higher high and higher low. A green candle was formed at closing and was on the verge of breaking through a 3-month-long pennant pattern with improving momentum (as indicated by growing RSI indicator). With the momentum still going strong, we believe a pattern break-out is on the horizon.

Golden cross as exhibited by the MACD recently confirms the growing momentum. Likewise, short-term bullishness is ascertained by upward pointing 20-EMA line.

If the stock breaks out the pattern, we think it could potentially test the resistance at RM1.29 (52-week high) first and subsequently at RM1.39 (new all-time high). Conversely, a fall below RM1.12 could indicate the start of a correction phase.

Entry – RM-1.23 – RM1.24

Stop Loss – RM1.11

Target Price – RM1.29 – RM1.39

Source: Mercury Securities Research - 5 Aug 2024