Technical Highlights

Yesterday, Pan Malaysia Holdings's trading volume significantly increased, reaching 2.5x more than its average 40-day trading volume. This caused the company's share price to rise above all of its EMA lines, following a recent consolidation period away from the 52-week high. The day ended with a large green candle forming as the share price surged. This indicates potential for further upside, as the large green candle broke through a 6-week-long pennant pattern with growing momentum (as indicated by rising RSI).

The golden cross exhibited by the MACD yesterday ascertained growing momentum. Likewise, the upward-pointing 20-EMA line confirmed short-term bullishness.

With the share price breaking through the pattern with momentum, we think the stock could potentially put the resistance to the test at RM0.43 (52-week high) first and subsequently at RM0.505 (determined by the difference of RM0.075 between the high and low of the pennant pattern). Conversely, a descent below RM0.345 could mark the start of a correction phase.

Entry – RM-0.410 – RM0.415

Stop Loss – RM0.340

Target Price – RM0.430 – RM0.505

Source: Mercury Securities Research - 24 Jul 2024