Technical Highlights

Momentum of the stock has been strong, as shown by the recent pattern of higher highs and higher lows. Despite recent market correction, the stock has quickly recovered and continued its upward trend. Yesterday, the share price surged and formed a large green candle at closing. There is potential for further upside, especially with the green candle gapping up and breaking through a 4-month long wedge pattern, supported by a significant surge in trading volume (11.3 times higher than the average 90-day total trading volume).

Yesterday, the golden cross in the MACD of the stock denotes momentum is growing. Similarly, the upward pointing 20-EMA and RSI line ascertains the short-term bullishness of the stock.

With the pattern break-out supported by these positive indicators, we think the stock could potentially test the resistance at RM0.300 (new 52-week high) first and subsequently at RM0.345 (appertaining to the RM0.045 difference between the high and low of the wedge pattern). Conversely, a descent below RM0.230 could indicate the commencement of a correction phase.

Entry – RM-0.280 – RM0.295

Stop Loss – RM0.200

Target Price – RM0.300 – RM0.345

Source: Mercury Securities Research - 13 Aug 2024