Technical Highlights

After reaching its 52-week high in early June, the stock fell into a wide correction phase. As trading interest waned and the stock fell into oversold territory, bargain- hunting activities reignited, sparking a recovery. Last Friday, the spike in trading interest (11.3x higher than its average 90-day trading volume) led the stock to close significantly higher and triggered a double bottom breakout. This pattern breakout sets the stage for potential further upside ahead.

Momentum indicators are showing strength. The RSI is advancing sharply toward the overbought zone, indicating sustained buying interest in the stock. Meanwhile, the exhibition of golden cross in the MACD last Friday further confirmed the stock's short- term bullish outlook.

For an ideal entry point, a range between RM0.220 and RM0.230 presents a good opportunity. The first resistance is set at RM0.245. If the stock breaks through this level, it could challenge RM0.275, the subsequent resistance level. However, a downside risk emerges if the stock falls below RM0.200, potentially signalling a false breakout and paving the way for a correction toward its 52-week low of RM0.165.

Entry - RM0.220 - RM0.230

Stop Loss - RM0.180

Target Price - RM0.245 - RM0.275

Source: Mercury Securities Research - 30 Dec 2024