Technical Highlights

The stock has been on a downtrend since reaching its peak in early April. Upon hitting its trough (52-week low) in September, the resurgence of buying interest reignited the recovery of the stock. This recovery appears credible, underpinned by a pattern of higher highs and higher lows. Recently, the upward momentum also led to a breakout from the triangle pattern, signalling a likely trend reversal.

Momentum indicators are strong. The RSI is recovering gradually, indicating buying interest is building up. Similarly, the MACD is also trending upward, which further reinforces the bullish outlook of the stock.

An ideal entry point lies in the range between RM1.10 and RM1.14. RM1.18 would be the first resistance to test, with the potential for a move to RM1.23 if it breaks through. On the flip side, if the stock reverses towards its key support level at RM1.10, this could signal a potential false trend reversal, with the likelihood of the stock consolidating further towards the RM1.04 level.

Entry – RM1.10 – RM1.14

Stop Loss – RM1.05

Target Price – RM1.18 – RM1.23

Source: Mercury Securities Research - 8 Nov 2024