Technical Highlights

The stock experienced multiple spikes that drove its price towards its 52-week high in late April. After reaching this high point, there was a brief period of consolidation as the stock's trading momentum weakened. However, the buying momentum picked up and the stock gradually rose. Yesterday, the pace of trading momentum increased rapidly, as indicated by a sharp upward-pointing RSI line, causing the stock to surge and form a large green candle at closing. This move broke through a pennant pattern that had lasted for approximately 4 months. We think this breakout, accompanied by growing momentum, as a strong signal of short-term bullishness in the stock.

The recent exhibition of a golden cross in the MACD supports a strong growing momentum narrative. Similarly, an upward-pointing 50-EMA line indicates a shortterm bullish trend for the stock.

Relying on the breakout pattern supported by growing momentum, we think that this strength will prompt the stock to test its initial resistance at RM0.440, followed by the subsequent resistance at RM0.495 (the 52-week high). Conversely, a stop-loss can be placed below the recent low at RM0.345.

Entry – RM0.400 – RM0.430

Stop Loss – RM0.295

Target Price – RM0.440 – RM0.495

Source: Mercury Research - 30 Aug 2024