Technical Highlights

Since 2024, the stock has been moving upward steadily, reaching RM5.18 before entering a five-month consolidation phase. It later broke out from this range, setting a new 52-week high at RM5.30. However, after hitting this peak, the stock faced selling pressure and declined, eventually finding strong support near RM3.30. Last week, it successfully broke out from the downtrend line with four consecutive green candles, signalling renewed buying momentum. Additionally, the stock appears to be forming a bullish W pattern; however, it is now facing the key resistance level at RM3.89, which also aligns with all three key EMAs.

Momentum indicators are looking good. The RSI has rebounded from the oversold zone and now stands at 45. Meanwhile, the MACD has successfully formed a golden cross, further reinforcing the potential of a trend reversal. If momentum continues to strengthen, the stock could push higher in the coming sessions.

An ideal entry point for this stock would be between RM3.70 and RM3.82. The first resistance to watch is RM3.89, and if the stock successfully breaks above this level, the next target will be RM4.27. If it manages to clear both of these resistance levels, the next upside target will be RM4.66. On the downside, if the stock trades below RM3.42, it would indicate further downside potential, as bearish momentum could extend. This setup offers an attractive risk-reward ratio of 3.2.

Entry - RM3.70 - RM3.82

Stop Loss - RM3.42

Target Price - RM3.89 - RM4.27 - RM4.66

Source: Mercury Securities Research - 6 Feb 2025