Technical Highlights

The stock has been on an upward trend since April 2024, reaching its peak in July before entering a downtrend. During this period, it formed a triangle pattern and held strong on a key support line around RM0.330. Last week, the stock successfully broke out of this triangle and initiated a pullback. This week, the pullback was completed, and the stock is now moving upwards again. Notably, a bear trap occurred two weeks before the breakout, adding strength to the stock’s momentum. The stock is currently trading above its 20-day and 200-day EMAs, though it faces resistance at the 50-day EMA.

Momentum indicators are positive conditions. The RSI has bounced from 47 to its current level of 53. Similarly, the MACD formed a golden cross earlier this month and continues to trend upwards.

A potential entry range between RM0.330 and RM0.340 presents a good opportunity. The first resistance stands at RM0.360, followed by a more challenging level at RM0.390. If the stock moves beyond RM0.390, it could test its 52-week high of RM0.420. On the downside, RM 0.315 serves as a critical support level. A drop below RM 0.295 would place the stock beneath its key EMAs, resulting in a false breakout and further downside movement.

Entry – RM0.330 – RM0.340

Stop Loss – RM0.295

Target Price – RM0.360 – RM0.390

Source: Mercury Securities Research - 25 Oct 2024