Technical Highlights

The stock has been in a persistent downtrend since early 2020. After reaching its trough, renewed buying momentum triggered a recovery, driving the stock into an upward trajectory. Recently, the stock completed the double-bottom pattern breakout, confirming a trend reversal. This breakout is validated by sustained trading above the critical RM0.29 level (highlighted in the red circle), which served as both the breakout trigger and a crucial support point. We believe this positive setup strengthens the stock's bullish outlook, indicating the potential for further upside movement in the near term.

Momentum indicators are also favourable. The RSI is accelerating toward the overbought territory, signalling sustained buying interest of the stock. Similarly, the upward-pointing 20-day EMA line is close to form a golden cross, further confirming the bullish outlook.

A strategic entry point can be set in the range between RM0.295 and RM0.305. With the momentum looking favourable, we think this could form a stage for the stock to challenge its first resistance at RM0.350. A further breach above this point could push the stock toward its subsequent target at RM0.375. If the stock moves in opposite direction toward and below its recent support level of RM0.260, this could mean the start of a correction phase. The stop loss can be set at RM0.240.

Entry - RM0.295 - RM0.305

Stop Loss - RM0.240

Target Price - RM0.350 - RM0.375

Source: Mercury Securities Research - 15 Jan 2025