Technical Highlights

Consolidation was observed in the stock after it peaked at RM0.585 (52-week high). This also caused the stock to hover below its 20-EMA line. Despite that, we see this consolidation as healthy as the stock has rebounded and closed with large green candle at the closing last Friday. Additionally, this rebound also broke through the channel pattern 2-month lasting channel pattern with growing momentum (as shown by upticking RSI indicator). Buoyed by these positive signals, we think the upticking opportunity of the stock is immerse.

Last Friday, the MACD exhibited a golden cross, which indicates strong momentum going forward. In addition, the RSI lines confirms its short-term bullishness.

With the pattern break-out supported by growing momentum, we think the share could test the resistance at RM0.545 first and subsequently at RM0.585 (52-week high). Conversely, consolidation starts if the share price dips below the RM0.450 support.

Entry – RM-0.495 – RM0.505

Stop Loss – RM0.420

Target Price – RM0.545 – RM0.585

Source: Mercury Securities Research - 12 Aug 2024