Technical Highlights

The stock is currently in a consolidation phase, forming a triangle pattern that’s getting close to a potential breakout. Even with the recent pullback, the price has consistently remained above the 200-day EMA. Additionally, the selling volume has been decreasing during this downtrend, indicating that the sellers are losing control, making it a potentially bullish signal.

Momentum indicators are beginning to reflect a positive shift. The MACD is close to forming a golden cross and the RSI has recovered from its recent oversold condition and moving upward.

Given the decreasing volume during the downtrend, a successful break above the RM0.440 level would be a significant bullish indicator. This level not only represents a potential breakout from the triangle but also aligns with the 20 and 50-day EMAs, which are key resistance points. A move above RM0.440 could trigger further upside momentum, potentially challenging the 52-week high. On the other hand, if the price falls below RM0.330 support, it would invalidate the triangle pattern and likely signal the beginning of a correction.

Entry – RM0.365 – RM0.380

Stop Loss – RM0.330

Target Price – RM0.440 – RM0.470

Source: Mercury Securities Research - 19 Aug 2024