Technical Highlights

The stock has been in a consistent macro uptrend since 2023, indicating long-term strength. Recently, the stock broke out from a downtrend line that had been restricting its upward movement, accompanied by a surge in buying volume. Currently, the stock is trading above its 200-day EMA, at the 20-day EMA, but still below the 50-day EMA.

Momentum indicators further support this bullish sentiment. The RSI is moving upward after hitting oversold levels recently, showing renewed buying interest. Additionally, the MACD recently formed a golden cross and continues to rise, while the steady increase in buying volume also adds to the positive outlook.

At this stage, the key focus should be on whether the stock can trade above the 50- day EMA, confirming the breakout. If it does, the stock could target RM0.755 to fill the gap left at the end of July. Surpassing this resistance would likely lead to a challenge of the RM0.855 level, near its 52-week high, which could attract further buying interest. However, if the stock falls below RM0.600, it could enter a correction phase and invalidating the long-term uptrend.

Entry – RM0.650 – RM0.680

Stop Loss – RM0.600

Target Price – RM0.755 – RM0.855

Source: Mercury Securities Research - 26 Aug 2024