Technical Highlights

The stock had been consolidating from its 52-week high recently. Despite a pullback from its previous 52-week high due to selling pressure, the stock regained its momentum and rallied to close higher with just a small step away from arriving at the previous 52-week high. With the green candle forming and breaking through the roughly 2-month-long channel pattern with significant trading volume (1.7 times higher than its average 90-day trading volume), it indicates that there may be more upside potential in play.

Growing momentum is expected going forward as portrayed by the golden cross in the MACD yesterday. Likewise, short-term bullishness is ascertained by the upward pointing 20-EMA and RSI lines.

Relying on these positive signals, we think the stock could potentially test the resistance at RM0.365 (52-week high) first and subsequently at RM0.450 (derived based on the difference of RM0.085 between the high and low of the channel pattern). Conversely, a descent below RM0.280 could indicate the commencement of a correction phase.

Entry – RM-0.350 – RM0.360

Stop Loss – RM0.250

Target Price – RM0.365 – RM0.450

Source: Mercury Securities Research - 8 Aug 2024