Technical Highlights

The stock had been trading in an uptrend despite experiencing some minor consolidations. It seemed to have found support at the 50-EMA line during the recent consolidation. At the close last Friday, there was a spike in trading volume (16.8 times higher than its average 90-day trading volume) with strong momentum (RSI > 70), which led the stock to close significantly higher with the formation of a large green candle that broke through the approximately 4-month long channel pattern. Based on these positive readings, we see the stock having more upside potential ahead. The upward-crossing of the MACD line over its signal line (golden cross) confirms the short-term bullishness in the stock. Similarly, the short-term trading momentum of the stock remains strong as displayed by both the upward-pointing RSI line and 20-EMA lines. With the pattern break-out accompanied by both strong momentum and volume, we think this could propel the stock to reach a new 52-week high by testing the resistance level at RM1.74. If the stock manages to break through this, it may attempt to test the subsequent resistance at RM1.84. Stop loss will be placed at its recent low price of RM1.57.

Entry – RM1.62 – RM1.67

Stop Loss – RM1.47

Target Price – RM1.74 – RM1.84

Source: Mercury Securities Research - 9 Sep 2024