Technical Highlights

After months of consolidation since March, the stock has shown renewed upward momentum, driven by strong buying interest. The recent breakout from a falling wedge pattern marked the start of a positive trend, with the stock now trending higher. At the last closing price of RM3.82, the stock is poised to test the key resistance at RM3.83, a level derived from its recent high. A breakout above this resistance would establish a strong foundation for further upside potential.

Momentum indicators are favourable. The RSI is accelerating sharply toward the overbought zone, indicating sustained buying interest in the stock. Meanwhile, the stock's bullish momentum is ascertained by the recent exhibition of golden cross in the MACD.

A range between RM3.80 and RM3.82 would be an ideal entry point. If the stock successfully breaks out above the key resistance level at RM3.83, this could propel the stock to challenge the next resistance level at RM4.02. On the flip side, a dip below RM3.67, the recent support level, could suggest a false reversal and the start of another consolidation phase.

Entry - RM3.80 - RM3.82

Stop Loss - RM3.57

Target Price - RM3.83 - RM4.02

Source: Mercury Securities Research - 27 Dec 2024