Technical Highlights

The stock had been trading below all its EMA lines as result of the consolidation activities over the past months. However, a reversal from the downtrend was seen recently when the stock rebounded and broke through the approximately 9-week long pennant pattern with growing momentum (RSI indicator is upticking). We think this rebound was healthy given the rally had sent the stock to trade above its 20-EMA line. With these positive signals, we think the upswing potential may be still on play.

Yesterday, the MACD exhibited a golden cross, which indicates strong momentum going forward. In addition, the upward-pointing 20-EMA and RSI lines confirm its short-term bullishness.

With the pattern break-out supported by growing momentum, we think the share could test the resistance at RM0.220 first and subsequently at RM0.245. Conversely, consolidation starts if the share price dips below the RM0.175 support.

Entry – RM-0.185 – RM0.195

Stop Loss – RM0.165

Target Price – RM0.220 – RM0.245

Source: Mercury Securities Research - 9 Aug 2024