Technical Highlights

After reaching its 52-week high, the stock entered a sharp correction phase, followed by a strong rebound as buying interest picked up in late May. The stock then slipped back into consolidation as the buying momentum cooled off. However, last Friday, renewed buying interest drove the stock to close significantly higher at RM0.975, marking a key resistance level for a potential triangle pattern breakout. With this surge in buying interest, the stock appears poised to initiate a breakout, signalling a bullish move ahead.

Momentum indicators are supportive of the pattern breakout. The RSI indicator is rebounding sharply from oversold levels, indicating a strong accumulation of buying interest. Likewise, the sharply upward-pointing 20 EMA and MACD lines further reinforce the short-term bullish outlook for the stock.

A range between RM0.940 and RM0.975 would be an ideal entry point. If the stock successfully breaks out above the key resistance level at RM0.975, it could target the next resistance level at RM1.04. A further breakout from this level could propel the stock towards the higher resistance at RM1.17. Conversely, if the stock drops below the recent support level at RM0.955, it could mean a return back to the consolidation phase.

Entry – RM0.940 – RM0.975

Stop Loss – RM0.935

Target Price – RM0.975 – RM1.04

Source: Mercury Securities Research - 4 Nov 2024