Technical Highlights

The stock has been in a steady uptrend since late 2023, and throughout this period, it has formed a falling wedge pattern. Last week, the stock broke out of this wedge with volume, indicating a potential shift in momentum. Interestingly, this isn’t the first time the stock has displayed this pattern before breaking out in an uptrend. Currently, it is challenging both the 50 and 200-day EMAs, while maintaining its position above the 20-day EMA.

Momentum indicators further support the bullish outlook. Buying volume has been increasing, and the RSI is currently at 50, rising sharply. Additionally, the MACD has formed a golden cross after staying neutral since August 2024.

The ideal entry point would be on a pullback, targeting a range between RM0.305 and RM0.315. If the breakout holds, the stock is likely to test its first resistance at RM0.360. A successful break above this could push the stock toward the next resistance at RM0.425, bringing it closer to its 52-week high. Conversely, if the stock falls to RM0.275, it may indicate a false breakout, potentially leading to a correction.

Entry – RM0.305 – RM0.315

Stop Loss – RM0.275

Target Price – RM0.360 – RM0.425

Source: Mercury Securities Research - 21 Oct 2024