Technical Highlights

The stock made several attempts to break out of its consolidation pattern since late May, but each effort was met with continued decline, forming a broader base. Yesterday, a spike in buying strength caused a gap up, breaking through the pennant pattern. This gap-up alongside the breakout is significant as it recovered all recent losses from the large market correction, signalling the stock's shift into a positive trend.

Momentum indicators are also supporting the bullish movement in the stock. The RSI hooked up significantly after a period of multiple small rebounds, signaling the return of strong buying interest. Meanwhile, both the upward-pointing MCD and the 20-day EMA line further confirm the bullishness of the stock going forward.

An ideal entry point can be seen in the range between RM0.490 to RM0.510. The first resistance level to watch is RM0.545, which is the stock’s 52-week high. If the stock can break through this level with sustained momentum, the next target would be at RM0.595. Conversely, if the stock drops below its recent low price of RM0.460, it would indicate the start of a consolidation phase.

Entry – RM0.490 – RM0.510

Stop Loss – RM0.440

Target Price – RM0.545 – RM0.595

Source: Mercury Research - 15 Oct 2024