Technical Highlights

The double gap-up followed by a series of consecutive green candles three months ago indicated a significant trend reversal. Yesterday, the surge in share price sent the stock to trade above its 20-EMA line. At the closing, a large green candle was formed, breaking past a pennant pattern that lasted approximately 4 months with growing momentum (RSI is growing) and considerable trading volume. With these indicators showing positive signals, we think that upward momentum may still be in play.

MACD is on the verge of forming a golden cross, which indicates strong momentum going forward. Additionally, the upward-pointing 20-EMA line confirms its short-term bullishness.

Amid the pattern break-out with momentum, we think the share could put the resistance RM0.900 and the subsequent resistance RM1.09 (52-week high) to the test. Conversely, consolidation starts if the share price dips below the RM0.810 support.

Entry – RM-0.855 – RM0.865

Stop Loss – RM0.800

Target Price – RM0.900 – RM1.09

Source: Mercury Securities Research - 30 Jul 2024