Technical Highlights

Consolidation activities was observed after the stock showed false rebounding signal back in May. Yesterday, the trading momentum picked up (as indicated by sharp upward pointing RSI line) and steered the stock to close higher. As result, this formed a large green candle which also broke through the approximately 3-month long pennant pattern. We see this pattern break-out accompanied by growing momentum as a strong foundation for potential rebound in the short-term.

The stock's increasing momentum is clearly indicated by the presence of a golden cross in yesterday's MACD reading. Additionally, the rising RSI line further confirms the stock's short-term bullishness.

If the stock’s momentum can sustain or increase further, we think it could test the first resistance level at RM0.280, which is just a small tick away from the current closing price of RM0.260. After the stock successfully breaks through the first resistance level, the RM0.390 resistance level would be the next target to attempt. Nevertheless, consolidation happens if the stock dips below its 52-week low price of RM0.230.

Entry – RM0.240 – RM0.260

Stop Loss – RM0.230

Target Price – RM0.280 – RM0.390

Source: Mercury Securities Research - 5 Sep 2024