Technical Highlights

The stock has been in a downward trend over the past 18 months, declining from RM1.190 to RM0.585. However, it has recently started showing signs of recovery, supported by increased buying momentum as the stock traded near the macro downtrend line. The stock is currently positioned above its 20-day and 50-day EMAs, signalling potential strength for a breakout from the downtrend. That said, it remains within a consolidation zone, with the key level to watch at RM0.740-aligned with the 200-day EMA. A breakout above this level could signal further upside potential.

Momentum indicators are showing positive signs. The RSI stands at 55 and has consistently remained above the neutral 50 zone for several months. Meanwhile, the MACD remains in positive territory and is on the verge of forming a golden cross, which could solidify the stock's bullish outlook.

The ideal strategy for this stock is an entry range of between RM0.680 to RM0.700. Should the stock break above the RM0.740 resistance, it could rally toward RM0.825. Sustained momentum may even drive it to the third target at RM0.910. On the downside, if the stock falls below RM0.600-near its 52-week low-it could signal a return to a downward trend.

Entry - RM0.680 - RM0.700

Stop Loss - RM0.600

Target Price - RM0.740 - RM0.825 - RM0.910

Source: Mercury Securities Research - 13 Dec 2024