Technical Highlights

The stock entered into a wide consolidation phase after peaking in mid-May 2024. Upon reaching its low point, the stock started to move in a sideways pattern due to subdued trading interest. Yesterday, the spike in the buying interest led the stock to close higher and triggered a wedge pattern breakout. At its last closing price of RM0.325, the stock also surpassed the key resistance-turned-support level at RM0.315 (marked by the red horizontal line). With this dual breakout - the wedge pattern and the breach of the RM0.315 level - we believe they form a strong stage for the stock to challenge for further upside.

Momentum indicators are supportive of the stock's positive outlook. The RSI is picking up and heading to the overbought zone, indicating strong buying interest remains on the card. Likewise, the build-up of the stock's positive momentum is ascertained by the recent exhibition of a golden cross in the MACD.

An ideal range would be between RM0.315 and RM0.325, allowing for a slight pullback for better positioning. The first key resistance stands at RM0.34. If the stock successfully breaches above this level, it could challenge the next target level at RM0.365. On the downside, if the stock falls below RM0.290, it could mean the start of a consolidation phase and a potential correction towards RM0.240 level, its 52- week low point.

Entry - RM0.315 - RM0.325

Stop Loss - RM0.280

Target Price - RM0.340 - RM0.365

Source: Mercury Securities Research - 15 Jan 2025