Technical Highlights

The stock has shown resilience by staying above the major support level of RM1.00, forming a triangle pattern during this consolidation phase. Last week, it broke out of this pattern, followed by a healthy pullback to the trendline. This was confirmed yesterday when the stock surged by 7%, signalling strength after the pullback. Additionally, a bullish W pattern has emerged, with the stock currently trading above all three key EMAs.

Momentum indicators further support this positive trend. The MACD is trending upward with increasing buying volume, and the RSI remains strong at 66, with room to rise. After few months of neutral activity, buying volume has spiked, suggesting renewed investor confidence.

For an ideal entry point, a range between RM1.18 and RM1.22 presents a good opportunity as the bullish W pattern nears its completion. The first resistance level to watch is RM1.25, and if it breaks, the next target to challenge would be the 52-week high of RM1.35. However, a downside risk exists if the stock falls below RM 1.10, which could drop back to the major support at RM1.00.

Entry – RM1.18 – RM1.22

Stop Loss – RM1.10

Target Price – RM1.25 – RM1.35

Source: Mercury Securities Research - 2 Oct 2024