Technical Highlights

The stock has been trading within a consolidation zone of RM0.77 to RM1.07 over the past three years, supported by an upward trendline. Recently, it broke out of this range to hit a fresh 52-week high, fueled by rising healthcare demand amid growing virus concerns. Adding to the optimism, Supermax is set to commence U.S.-based glove production in January 2025. To sweeten the deal, the company proposed a 1-for-5 bonus issue with 1-for-20 free warrants to reward its shareholders yesterday.

Momentum indicators are aligning with this bullish narrative. The RSI is currently at 78, while the MACD is sharply climbing, supported by trading volume hitting its highest level since May 2024. Additionally, the stock is also trading above all three key EMAs.

An ideal strategy would be wait for a slight pullback, with an entry range between RM1.14 and RM1.19. The first resistance level to test is RM1.30, with upside potential toward RM1.50 if the breakout continues. On the downside, caution is advised if the stock slips below RM1.07, which could indicate a reversal in momentum.

Entry - RM1.14 - RM1.19

Stop Loss - RM1.07

Target Price - RM1.30 - RM1.50

Source: Mercury Securities Research - 19 Dec 2024