Technical Highlights

The stock has been forming a classic falling wedge pattern, and today, it finally broke out with a surge in buying volume, a promising sign of renewed buying power. Despite the recent drop, the stock has maintained its macro uptrend, which has been in place since 2022. The price action has shown resilience by bouncing back into the wedge pattern and now trading above the 20-day, 50-day, and 200-day EMAs, all pointing to a bullish outlook.

Momentum indicators are also turning positive. The RSI is pointing upwards, indicating increasing bullish momentum. The MACD has neutralized but is on the verge of forming a golden cross, provided the selling volume continues to decrease.

Should the stock continue to experience strong buying volume in the coming days, this could support the ongoing uptrend, potentially reaching the first resistance at RM1.37. A successful breakout above this level could push the stock towards RM1.52 which is the 52-week high. On the downside, a conservative stop-loss can be placed just below the recent low at RM 1.18 to protect against a possible false breakout.

Entry – RM1.26 – RM1.31

Stop Loss – RM1.18

Target Price – RM1.37 – RM1.52

Source: Mercury Securities Research - 23 Aug 2024