Technical Highlights

The stock saw a period of consolidation after hitting its 52-week high at RM0.480. However, the consolidation seems to have been short-lived as the stock started to pick up shortly after, between late May and late June. We believe the uptrend can be sustained, as it has been trading in a pattern of higher highs and higher lows, accompanied by growing momentum. Additionally, the stock was on the verge of breaking through the RM0.395 resistance level of its 9-week-long pennant pattern. The trading volume, which was 1.3 times higher than its 90-day average at the closing last Friday, supports our view that a pattern breakout is imminent. With the soon-to-be golden cross as exhibited by the MACD reading, this shall ascertain the growing momentum in the stock. Additionally, the increase in the RSI indicator and upward-pointing 20-EMA line denote the short-term bullishness of the stock. If the stock can successfully break through the crucial RM0.395 resistance level of the pattern with sustained trading volume and momentum, we believe this will give the stock the strength to challenge its subsequent RM0.48 resistance level. Conversely, consolidation happens if the stock dips below its RM0.380 support level.

Entry – RM0.380 – RM0.390

Stop Loss – RM0.330

Target Price – RM0.395 – RM0.480

Source: Mercury Securities Research - 9 Sep 2024