Technical Highlights

After reaching the 52-week high, the stock enters into a consolidation phase as trading momentum slowed down. In early August, the trading momentum returned and led the stock to recover and trended upward slowly. Yesterday, the uptrend movement signal became more affirmative when the stock closed significantly higher and broke through the pennant pattern with substantial trading volume (1.8x of its average 90-day total trading volume). Additionally, the pattern breakout also causes the stock to break through the key resistance level at RM1.37 and trade above all of its EMA lines. These multiple bullish signals indicate that more upside movement is underway.

Momentum indicators show a strengthening of momentum which is supportive of the upside movement as displayed by both the RSI and MACD trending upward sharply.

An ideal entry point for this stock would be within the RM1.35 to RM1.38 range. The first resistance is set at RM1.44, and if the stock breaks this level, it could challenge RM1.55, the next resistance level. On the downside, if the stock falls below RM1.28, it will indicate a false breakout, likely triggering a correction toward RM1.22, the recent lowest price point.

Entry – RM1.35 – RM1.38

Stop Loss – RM1.23

Target Price – RM1.44 – RM1.55

Source: Mercury Research - 9 Oct 2024