Technical Highlights

The stock reached a peak in July 2024 before entering a prolonged downtrend. However, it has recently shown signs of a turnaround. After struggling to break the key resistance level at RM4.00, the stock finally broke out in early December, supported by a bullish W pattern. What's more encouraging is the healthy pullback above the RM4.00 resistance, which confirmed the breakout's strength. With yesterday's 4.2% gain, the stock is now trading firmly above its all three key EMAs.

Momentum indicators further support the bullish outlook. The RSI is at 68 and still trending upward, though staying below the overbought threshold, which leaves room for further gains. Additionally, the MACD formed a golden cross in late November and continues to move higher, indicating sustained positive momentum.

An ideal strategy for this stock would be to wait for a slight pullback, with an entry range between RM4.11 and RM4.23. The first resistance level is at RM4.61, and if the stock breaks through this, it could rally toward the second target at RM5.03. On the downside, if the stock falls below RM3.92, it risks a sharp decline to RM3.35.

Entry - RM4.11 - RM4.23

Stop Loss - RM3.92

Target Price - RM4.61 - RM5.03

Source: Mercury Securities Research - 17 Dec 2024