Technical Highlights

A series of upswings over the last few months had sent the stock to its 52-week high at RM1.31. Subsequently, a consolidation occurred and led the stock to trade below its 50-EMA line as buying momentum eased. Yesterday, there was a surge in buying interest for the stock, causing its price to spike and forming a large green candle at closing. The formation of the green candle broke through the pennant pattern that had lasted for 3 weeks, and this was accompanied by a surge in buying volume (1.8x higher than its average 90-day total trading volume). The breakout pattern combined with these positive technical indicators suggest that there may be more potential for an upward trend in the near future.

The RSI line pointing upwards and the imminent formation of a golden cross by the MACD indicator demonstrate the stock's short-term bullish trend.

With the last closing price of the stock trading above its 20-EMA line accompanied by pattern break-out, we think this shall warrant the stock to put its RM1.12 resistance to the test first, followed by the next resistance at RM1.27. Conversely, consolidation commences if the share price dips below the RM0.955 support.

Entry – RM1.02 – RM1.07

Stop Loss – RM0.905

Target Price – RM1.12 – RM1.27

Source: Mercury Securities Research - 27 Aug 2024