Technical Highlights

The stock has been in a steady decline since June, forming a clear downward trendline. However, things took a turn yesterday when it finally broke out of this pattern with a strong surge in buying interest, marking the highest volume since July. Currently, the stock is trading comfortably above the 20-day EMA, showing early signs of recovery, though it is approaching a key test nears the 50-day and 200-day EMAs - levels that could make or break this momentum. Momentum indicators are supporting this breakout. The MACD has just completed a golden cross, a classic bullish signal, while the RSI is showing a promising upward slope. As the strength is building, we might be on the verge of a more significant move if the momentum continues. While considering an entry, a favourable zone would be between RM 0.25 and RM 0.26, offering a solid risk-reward ratio. Should today trading deliver another green candle, we could see the price aiming for RM 0.30, with RM 0.32 as the next target. If there’s a surge of large buy orders near RM 0.32, the stock might witness a rapid, sharp upward move. On the flip side, if this breakout falters, the stock could retrace back to RM 0.225, signalling a potential correction.

Entry – RM0.250 – RM0.260

Stop Loss – RM0.225

Target Price – RM0.300 – RM0.320

Source: Mercury Securities Research - 11 Sep 2024