Technical Highlights

The stock had been in a downtrend since October 2024 and unable to break out of its downward trendline. However, last week, it traded within a squeeze zone, and this week, it has finally broken out of the downtrend pattern with strong volume and successfully to hold above the 20-day EMA. The stock now looks poised to challenge the 50-day and 200-day EMAs in the near term.

Momentum indicators are also showing positive signs. The RSI is currently at 51 and is trending upward, indicating balanced but growing buying interest. Additionally, the MACD also formed a golden cross last week and continues its upward trajectory.

An ideal strategy would involve entering between RM1.18 and RM1.20. The first resistance is near the 50-day and 200-day EMAs at RM1.26, with a second resistance level at RM1.34. If the stock manages to break past these levels, it could potentially target a third resistance zone at RM1.42. Conversely, if the stock drops below RM1.13, it would indicate a false breakout and resuming its downward momentum.

Entry - RM1.18 - RM1.20

Stop Loss - RM1.13

Target Price - RM1.26 - RM1.34 - RM1.42

Source: Mercury Securities Research - 2 Jan 2025