Technical Highlights

Yesterday, the stock made an impressive breakout from a long consolidation period, reaching a new high not seen since July 2022. In addition to the consolidation box pattern, it is also breaking out from an ascending triangle - a classic bullish signal. This breakout has allowed the stock to trade above all three key EMAs, suggesting a strong upward trajectory. Momentum indicators are looking favourable, although the stock is slightly overbought with the RSI currently at 70. The MACD formed a golden cross before the breakout and continues to trend upwards. Furthermore, trading volume has spiked significantly compared to the usual levels over the past two years, highlighting increased interest and activity in the stock. Given the stock’s current momentum, it may be prudent to wait for a slight pullback before entering. The ideal entry range is between RM0.42 and RM0.44. The first resistance is RM0.50, closely aligned with its IPO opening price. A breakthrough at this level would reflect strong investor confidence and could pave the way for a rise to RM0.54. However, some sideways movement may occur as this area has historically acted as a significant resistance. On the flip side, if the stock falls below RM0.38 support, it could indicate a downward trend.

Entry – RM0.42 – RM0.44

Stop Loss – RM0.38

Target Price – RM0.50 – RM0.54

Source: Mercury Securities Research - 26 Sep 2024