The stock has been on an extended bull run, reaching a peak in July 2024 before entering a consolidation phase. Since then, it has been trading within a rectangle pattern between RM2.81 and RM3.19. Notably, a W-shaped pattern has emerged and yesterday, the stock tested the key resistance zone at RM3.19, which also marks the upper boundary of the rectangle. What makes this move more significant is the trading volume, the highest since September 2024, accompanied by a breakout above the three key EMAs. Additionally, the crossover between the 20-day and 50-day EMAs further reinforces the bullish sentiment, signalling a possible trend reversal.
Momentum indicators are also looking good. The RSI has climbed steadily to 68 after hovering in neutral territory in late December. Meanwhile, the MACD has also been trending upward, indicating strengthening momentum.
An ideal range would be between RM3.09 and RM3.19, waiting for a slight pullback for better positioning. The first key resistance stands at RM3.30, followed by RM3.47. If the stock successfully clears these levels, it could challenge its 52-week high of RM3.68. On the downside, if the stock falls below RM2.94, it could return back to the previous consolidation zone near RM2.82.
Entry - RM3.09 - RM3.19
Stop Loss - RM2.94
Target Price - RM3.30 - RM3.47 - RM3.68
Source: Mercury Securities Research - 7 Jan 2025
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