Technical Highlights

The stock had been trading below all its EMA lines since early May. However, the momentum of stock picked up recently and pushed its share price to trade above all its EMA lines. At closing yesterday, the stock rebounded and closed with a large green candle. We think the stock may subject to more upside opportunity as evident by the green candle that broke through the 10-week long channel pattern with strong momentum (RSI is near approaching the overbought territory) and substantial trading volume (7.3x higher than its average 90-day trading volume).

The golden cross exhibited by the MACD yesterday indicates strong momentum going forward. Likewise, the upward pointing RSI and 20-EMA line confirms the short-term bullishness of the stock.

Given these positive technical indicators, we think the share could test the resistance at RM1.47 first and subsequently at RM1.57. Conversely, consolidation starts if the share price dips below the RM1.25 support.

Entry – RM-1.33 – RM1.36

Stop Loss – RM1.20

Target Price – RM1.47 – RM1.57

Source: Mercury Securities Research - 14 Aug 2024