The stock surged and closed at a new 3.5-year high, breaking out of its 2- month rectangle pattern. This breakout indicates that the next wave up is now taking place and further upside is possible in the near-term. The higher highs and higher lows structure from the RM1.01 low in July and the rising EMAs support the idea that the current uptrend is likely to continue.

Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) found support at their respective support levels and then continued to climb higher. Both indicators are constructive for the current uptrend.

We think that aggressive traders may want to go long now with a stop-loss set at RM1.23 (marginally below the 50-day EMA). Follow-through buying may lift prices to test the RM1.40 historical resistance followed by the Fibonacci targets at RM1.49 (1.382) and RM1.58 (1.618) next.

Source: CGS-CIMB Research - 28 Feb 2024