Technical Highlights

In mid-August, the stock entered into an ascending trend movement as buying interest saw sharp upticks. During this period, a false trend reversal signal was observed when the stock jumped up initially but pulled back at the closing in mid-October. The pullback was temporary as the stock quickly regained momentum. Yesterday, a surge in buying interest propelled the stock significantly higher, triggering an ascending triangle pattern breakout. This also breached the recent high price point of RM0.99, a crucial resistance level. With multiple positive signals aligning, we think the triangle pattern breakout is credible, supporting the likelihood of further upside movement.

Momentum indicators are favourable. The RSI continued accelerating towards the overbought zone, signalling that buying interest remains intact. Meanwhile, both the upward-pointing 20-day EMA and MACD lines confirm the build-up of strong positive momentum in the stock.

A strategic entry point can be seen in the range between RM0.99 and RM1.01. The first target resistance for the stock to test would be at RM1.05. Should the stock continue to trend upward and break above this point, the RM1.11 level would be the next resistance target to challenge. Conversely, the stock could potentially enter into a consolidation phase if it dips below RM0.935, a crucial support level.

Entry - RM0.990 - RM1.01

Stop Loss - RM0.900

Target Price - RM1.05 - RM1.11

Source: Mercury Securities Research - 22 Nov 2024