Technical Highlights

The stock had been moving within a descending channel for almost four months—a pattern known for its bullish potential when broken. Last Friday, we finally saw a breakout, accompanied by a sharp increase in volume, signalling fresh buying interest. While it has managed to break above the 20-day EMA, it’s still below the 50- day and 200-day EMAs, leaving room for further upside as momentum builds. Speaking of momentum, the indicators are turning positive. The RSI is sitting at 51 and trending upward. Meanwhile, the MACD recently made a golden cross right near the breakout. Currently, the stock is trading in the RM3.30 to RM3.87 range, with strong and consistent buying volume at these levels. Since the breakout from the descending channel is still fresh, waiting for a slight pullback could be a smart move. A retracement to the RM3.73 area would offer a good entry point, especially as the stock is now challenging the 200-day EMA. A solid close above RM3.87 would further support a bullish outlook. First resistance lies at RM4.24, and breaking that could push the stock towards RM4.60. That said, RM4.60 might be tough to crack since it was a strong support level before flipping into resistance. On the downside, if RM3.30 fails to hold, we could be looking at the start of a deeper correction.

Entry – RM3.73 – RM3.83

Stop Loss – RM3.30

Target Price – RM4.24 – RM4.61

Source: Mercury Securities Research - 24 Sep 2024