Technical Highlights

The stock dipped into consolidation phase after reaching its 52-week high in early July. Yesterday, the stock showed a significant increase in trading interest (2.1x higher than the 90-day average trading volume), pushing the stock to close substantially higher. This also triggered a triangle pattern breakout and sent the stock to trade above its short-term 20-day EMA line. These multiple positive signals were supportive of a trend reversal in the stock.

Momentum indicators are showing strength to support the trend reversal. The RSI is hooking up after a period of mild movement, indicating the buying interest is building up. Similarly, the upward-pointing MACD line further ascertains the formation of bullish momentum in the stock.

The strategic entry point range is between RM0.790 and RM0.805. With the bullish momentum sustained, the stock could challenge its first resistance at RM0.815. Should the stock break above this point, it would form a stage for the stock to challenge its next target at RM0.865. Conversely, the stock's support is at RM0.760; any move toward or below this level may indicate a false breakout, potentially leading back into consolidation.

Entry - RM0.790 - RM0.805

Stop Loss - RM0.730

Target Price - RM0.815 - RM0.865

Source: Mercury Securities Research - 19 Nov 2024