Technical Highlights

Recently, the stock underwent a period of consolidation after reaching its 52-week high. This led to the share price trading below its 20-EMA line and subsequently breaking through the support line of the channel pattern. However, the stock showed signs of reversal when it rebounded above the support line of the channel pattern yesterday, supported by growing momentum (indicated by growing RSI reading) and substantial trading volume (2.1x higher than its average 90-day trading volume). With these positive technical indicators, we see the opportunity for the stock to revisit its 52-week high as promising.

The stock's momentum was bolstered by a golden cross in its MACD yesterday. Additionally, the short-term bullishness is confirmed by upward-pointing 20-EMA and RSI lines.

Relying on the trend reversal with strong momentum and trading volume, we believe the stock has the potential to test the resistance at RM1.33 (52-week high) first and subsequently at RM1.40. Conversely, a dip below RM1.10 could signify the start of a correction phase.

Entry – RM-1.20 – RM1.24

Stop Loss – RM1.05

Target Price – RM1.33 – RM1.40

Source: Mercury Securities Research - 15 Aug 2024