Technical Highlights

The stock broke below the wedge pattern in July after consolidating from its 52-week high. After the pattern breakout, the stock regained its trading momentum and made multiple attempts to challenge the crucial resistance level at RM0.440, but was unsuccessful and sent multiple false reversal signals. However, we think a strong reversal signal in the stock has appeared, with trading momentum recently picked up and accompanied by a typical bullish W pattern. The stock surged and is now on the verge of breaking through the key resistance level at RM0.440.

Rebound in the RSI indicator and the occurrence of the golden cross in the MACD confirm the stock's strong momentum in the near term.

If the stock can break through the crucial RM0.440 key resistance level with sustained strong trading momentum, we think this shall warrant the stock to challenge its next resistance level at RM0.525. However, a potential correction could occur if the stock dips below its RM0.370 support level (derived from its recent low).

Entry – RM0.400 – RM0.430

Stop Loss – RM0.330

Target Price – RM0.440 – RM0.525

Source: Mercury Securities Research - 4 Sep 2024