Technical Highlights

The stock has been in a consolidation phase for eight months and is now showing signs of a potential breakout. After briefly dipping below its 200-day EMA, it rebounded strongly by 16%, highlighting significant buying interest. Since the stock is holding above its 200-day EMA with its share trading in a pattern of higher high and higher low recently, we think the break-out of the key resistance of the triangle pattern at RM0.825 is imminent.

Momentum indicators are also turning positive, with the MACD recently forming a golden cross, which often signals the start of an upward trend.

A successful breakout above the RM0.825 resistance level of the triangle pattern, could quickly push the stock to challenge the next resistance at RM0.885 (52-week high). Conversely, if the price dips below RM0.755, it could signal the beginning of a correction phase.

Entry – RM-0.790 – RM0.810

Stop Loss – RM0.745

Target Price – RM0.825 – RM0.885

Source: Mercury Securities Research - 15 Aug 2024