Technical Highlights

Multiple downtrend swings sent the stock to its low before it began to pick up as trading momentum returned. Although the stock showed improvement in mid- September, it soon appeared to lose traction, trending downward and potentially signalling a false trend reversal. However, we see this as unlikely, as the trading momentum of the stock remains strong. Buoyed by the strong buying volume, the stock closed significantly higher yesterday, breaking through the pennant pattern. With these multiple positive technical signals in place, the stock appears poised for further upside potential.

Momentum indicators are strong and supportive of the uptrend movement of the stock ahead. The RSI indicator is rising toward its overbought zone, signalling renewed buying interest. Likewise, the upward-trending MACD is approaching a golden cross, confirming the stock's short-term bullish potential.

An ideal entry lies within the RM2.39 to RM2.45 range. If trading momentum persists, the stock may challenge its nearby resistance at RM2.49. A successful breakout at this level would set the next resistance target at RM2.66. Conversely, a drop below the recent support at RM2.35 could indicate a false pattern breakout

Entry – RM2.39 – RM2.45

Stop Loss – RM2.28

Target Price – RM2.49 – RM2.66

Source: Mercury Securities Research - 30 Oct 2024