Technical Highlights

The stock has been in a consolidation phase since mid-May, marked by multiple large gap-downs and persistent downtrends that drove it to a 52-week low. After reaching its trough, renewed buying interest briefly pushed the stock higher, but the momentum failed to sustain, leading to another downward move. Last Friday, however, a 2.6x spike in trading volume (relative to its 90-day average) propelled the stock to close higher, breaking through the triangle pattern. These positive developments indicate the potential formation of a trend reversal.

Momentum indicators support this bullish outlook. The RSI has begun to rebound from its neutral stance, signalling an accumulation of buying interest. Additionally, the recent golden cross in the MACD further confirms the strengthening bullish momentum.

For an ideal entry point, it can be observed in the range from RM0.530 to RM0.540. The first target resistance for the stock to test would be at RM0.555. If the buying momentum remains intact, it could form a stage for the stock to challenge its subsequent target level at RM0.635. Conversely, if the stock dips below its crucial support of RM0.510, this could signal a false pattern breakout and follow by the start of consolidation phase.

Entry - RM0.530 - RM0.540

Stop Loss - RM0.490

Target Price - RM0.555 - RM0.635

Source: Mercury Securities Research - 25 Nov 2024