Technical Highlights

The stock had been experiencing consolidation from its 52-week high since last year February. However, the stock regained momentum since June and started picking up with a pattern of closing at higher high and high low. Last Friday, its share price surged, forming a large green candle at closing and broke through an approximately 10-week long wedge pattern with considerable trading volume (1.8x higher than its average 90 days trading volume). With the break-out supported by these positive indicators, we think the upside potential of the stock is promising.

Last Friday, the golden cross in the MACD of the stock denotes its momentum is growing. Similarly, the upward pointing 20-EMA and RSI line ascertains the short- term bullishness of the stock.

With pattern break-out, we think the stock could potentially test the resistance at RM1.03 first and subsequently at RM1.12 (52-week high). Conversely, a descent below RM0.900 could indicate the commencement of a correction phase.

Entry – RM-0.930 – RM0.960

Stop Loss – RM0.870

Target Price – RM1.03 – RM1.12

Source: Mercury Securities Research - 12 Aug 2024