Technical Highlights

Since 2024, the stock has been moving upward steadily, reaching a 52-week high of RM5.38. After hitting this peak, it underwent a healthy pullback and found strong support at the 200-day EMA. The stock has also rebounded twice from this level. This Tuesday, it successfully broke out from the downtrend line with strong volume and is now approaching the 20-day and 50-day EMAs, the key levels to watch in the coming sessions.

Momentum indicators suggest improving conditions. The RSI has bounced back from the oversold zone and now stands at 49. Meanwhile, the MACD has successfully formed a golden cross, reinforcing the potential for a trend reversal. If the momentum continues to build, the stock could see further upside in the near term.

An ideal entry for this stock would be between RM4.28 and RM4.38. The first key resistance to watch is RM4.50, which aligns with the zone of 20-day and 50-day EMAs. A successful breakout above this level could push the stock toward the next resistance at RM4.68. If the stock manages to break through both of these resistance levels, the next target will be RM4.90. On the downside, if the stock trades below RM4.13, it has the potential of revisiting the 200-day EMA. At that point, the focus will be on whether the bullish pressure can sustain and hold above the support. This setup offers an attractive risk-reward ratio of 3.

Entry - RM4.28 - RM4.38

Stop Loss - RM4.13

Target Price - RM4.50 - RM4.68- RM4.90

Source: Mercury Securities Research - 6 Feb 2025