Technical Highlights

After reaching a 52-week high at RM1.14, the stock entered a period of consolidation and traded below all its EMA lines. However, the stock showed a significant surge in momentum yesterday, as evidenced by an increase in the RSI reading. This surge led to the formation of a large green candle and broke through the pennant pattern as well as the key resistance level at RM 0.760. We think these positive technical indicate that uptrend for the stock is potentially underway.

Strong momentum is displayed by the recent golden cross in the MACD indicator. Meanwhile, short-term bullishness in the stock is affirmed by both the upward-pointing 50-EMA and RSI lines.

With the pattern break-out supported by growing momentum, we see this as a strength for the stock to challenge its first resistance at RM0.810 and the subsequent resistance at RM0.905. Conversely, a stop loss can be put at the recent low price of RM0.720.

Entry – RM0.755 – RM0.785

Stop Loss – RM0.670

Target Price – RM0.810 – RM0.905

Source: Mercury Research - 4 Sept 2024