Technical Highlights

The stock has been on a steady uptrend since mid-2023, consistently bouncing back from the uptrend line more than 5 times. Yesterday's impressive 4.1% gain propelled the stock to the ceiling of its downtrend line, creating anticipation for a breakout with sufficient buying momentum. Additionally, the stock has also formed a bullish W- pattern inside the trendline, further enhancing the breakout potential. It is currently trading above the 20-day EMA and is nearing the 50-day and 200-day EMAs.

Momentum indicators are also aligning positively. The RSI is at 52 and continues to climb after rebounding from oversold territory, while the MACD has confirmed a golden cross since late November and remains on an upward trajectory. Trading volume also has been steadily increasing.

The ideal entry strategy is to target a range between RM1.48 and RM1.52, while closely monitoring the W-pattern and potential breakout above the downtrend line. If the breakout materialises, the stock could test the first resistance at RM1.63. A successful move beyond this level would shift the focus to the second resistance at RM1.75, a historically significant support zone that may present some challenges. Conversely, if the stock falls below RM1.41, this would signal a breach of the uptrend line, potentially marking the start of a corrective phase.

Entry - RM1.48 - RM1.52

Stop Loss - RM1.41

Target Price - RM1.63 - RM1.75

Source: Mercury Securities Research - 13 Dec 2024