Technical Highlights

The past formation of double Marubozu candles sent the share price of PGF Capital to trade above all its EMA lines. Yesterday's jump in the share price, with a large green candle at closing, provided the momentum to break through the approximately 4-week-long pennant pattern. With the considerable momentum (RSI >70), we think the share's uptick potential may be in the offing.

The share's momentum is tied to the recent golden cross indicated by the MACD. Additionally, the upward-pointing 20-EMA line confirms its short-term bullishness.

With the pennant pattern breaking out and positive momentum, we think the share could test the RM2.52 resistance (the new all-time high) and subsequent RM2.69 resistance (grounded based on the difference of RM0.17 between the high and low of the pennant pattern). Conversely, consolidation happens if the share price dips below the RM2.16 support.

Entry – RM-2.42 – RM2.43

Stop Loss – RM2.06

Target Price – RM2.52 – RM2.69

Source: Mercury Securities Research - 23 Jul 2024