The stock has a bullish engulfing pattern yesterday, where the candle engulfed the previous 8 candles. The stock also took out the resistance of its 2-week long bullish wedge pattern, which is another positive. Supported by the 50-day EMA, the stock appears ready to swing higher in the coming days.
Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) have hooked up again, indicating that buying momentum is rising again.
We think that aggressive traders may want to go long here or on weakness with a stop-loss set at RM0.335 (marginally below the recent swing low). On the upside, prices may push on to test RM0.405 (the 62% Fibonacci retracement level of the fall from RM0.44 to the recent low of RM0.34). We would not rule out a retest of its 52-week high at RM0.44 thereafter.
Source: CGS-CIMB Research - 23 Jul 2024
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