Technical Highlights

Multiple upswings, including a gap-up in recent months, sent the stock towards its 52- week high. However, trading momentum began to weaken, leading to a minor market correction. Yesterday, renewed buying interest drove the stock to close significantly higher, with minimal selling pressure. This resulted in the formation of a Marabozu candle, breaking out of a pennant pattern. These multiple bullish signals indicate that the stock has likely shifted back into a positive upward trend, recovering from the recent market correction.

Momentum indicators are strong and align well with the shift in trend movement of the stock. The RSI has rebounded from its recent flat movement, signalling increased buying pressure. Similarly, the MACD is trending upward and is on the verge of forming a golden cross, further confirming that bullish momentum is building.

A good entry point can be seen in the range between RM1.48 to RM1.53. With the pattern breakout accompanied by increased buying momentum, this could push the stock to test its first resistance level at RM1.57, which is also its 52-week high. Breaching the first resistance could fuel the stock to challenge its subsequent resistance level at RM1.67 level. However, a drop below the RM1.40 support level could signal a return to the consolidation phase.

Entry – RM1.48 – RM1.53

Stop Loss – RM1.35

Target Price – RM1.57 – RM1.67

Source: Mercury Securities Research - 17 Oct 2024