Technical Highlights

After reaching 52-week high, a falling channel pattern was formed as the stock consolidated in tandem with the decline in trading volume. Yesterday, the stock closed higher, and is backed by the return in trading interest. At the last closing price of RM0.81, the stock is close to trigger the falling channel pattern breakout. If the buying interest remains favourable, we think the pattern breakout is likely underway and further upside movement could follow through.

Momentum indicators are supportive of the pattern breakout. The RSI is accelerating, signalling the return of trading momentum. Similarly, the build-up of positive momentum is affirmed by the MACD nearing the point to initiate a golden cross.

The price range between RM0.790 to RM0.810 serve as a good entry opportunity. The first resistance stands at RM0.825. Breaking above this point would means the stock has initiated the falling wedge pattern breakout. Thus, this could push the stock to test its next resistance at RM0.875. Conversely, if the stock descends towards RM0.760, this could mark the start of consolidation phase.

Entry - RM0.790 - RM0.810

Stop Loss - RM0.730

Target Price - RM0.825 - RM0.875

Source: Mercury Securities Research - 5 Dec 2024