Technical Highlights

The stock has completed an inverse head and shoulders pattern and is now awaiting breakout confirmation. This potential breakout is supported by strong buying volume, the highest since June 2024, which aligns with the pattern's setup. The stock has faced consistent resistance from a downward trendline, with pullbacks on each of the previous touches. However, on the fourth touch, the stock has broken above all three key EMAs, increasing the chances of a confirmed inverse H&S breakout.

Momentum indicators are showing a positive trend. The RSI is trending upward, currently at 56, after a recent bounce from 48. Meanwhile, the MACD has also moved upward and formed a golden cross earlier this month.

An ideal entry range is between RM2.24 and RM2.30, with the first resistance at RM2.35, marking the neckline of the inverse head and shoulders pattern. If the breakout holds, the stock will target the second resistance at RM2.58. On the downside, a drop below RM2.18 would break the shoulder support, potentially leading to a further decline toward RM2.10.

Entry - RM2.24 - RM2.30

Stop Loss - RM2.10

Target Price - RM2.35 - RM2.58

Source: Mercury Securities Research - 15 Nov 2024