Technical Highlights

The stock has been forming a falling wedge pattern since June 2024, with the resistance line tested twice previously but failing to break out. Yesterday, the stock tested this resistance line again and is now trading above the 20-day and 50-day EMAs, signalling a potential breakout as bullish momentum builds.

Momentum indicators look promising, with the RSI at 60 and trending upward after a recent bounce. Furthermore, the MACD formed a golden cross last week and is steadily heading higher. Buying pressure has reached its highest level since September, adding strength to the potential breakout scenario.

A favourable entry point for this stock is between RM0.665 and RM0.68, with the first resistance at RM0.705. If this level is successfully breached, the next resistance at RM0.750 could be tested. Breaking through this second level, which has acted as consolidation zone since August, could pave the way for a further rally toward RM0.820. On the flip side, if the stock falls below RM0.625, it will trigger a correction.

Entry - RM0.665 - RM0.680

Stop Loss - RM0.625

Target Price - RM0.705 - RM0.750

Source: Mercury Securities Research - 26 Nov 2024