Technical Highlights

The stock remained in consolidation mode despite a brief rally in early May. Following a false trend reversal signal, it entered a deep correction phase, reaching a 52-week low in late August. Since then, it has traded sideways, forming a triangle pattern. Yesterday, a surge in buying interest drove the stock significantly higher, breaking through the triangle pattern. This breakout lifted the stock above its 20-day EMA, signaling strong support for the breakout and the onset of a trend reversal.

Momentum indicators are supportive of the trend reversal movement. The RSI has rebounded sharply from the sideways movement, indicating that buying interest has returned and is building up swiftly. Meanwhile, a golden cross displayed in the MACD indicator yesterday also further ascertains another positive signal for upward momentum.

An ideal entry range lies between RM0.320 and RM0.330. If the stock continues upward with sustained momentum post-breakout, it could gain strength to test its first resistance at RM0.355, with a subsequent target at RM0.385. With RM0.310 as a key support level, any move below this point would indicate a false breakout, suggesting that consolidation may continue.

Entry – RM0.320 – RM0.330

Stop Loss – RM0.290

Target Price – RM0.355 – RM0.385

Source: Mercury Securities Research - 29 Oct 2024