Technical Highlights

The stock has undergone a significant U-shaped recovery since January 2024, with a neckline forming at RM0.83. After reaching this level, it began to move downward, forming a bullish falling wedge pattern. Yesterday, the stock broke out from the wedge and is currently trading above both the 20-day and 50-day EMAs, although it remains below the 200-day EMA. Additionally, there is potential for a cup-and-handle pattern to form, as the "cup" was completed between January and July 2024. If the stock rises back to the RM0.83 neckline, this bullish pattern could materialise.

Momentum indicators support a positive outlook, with the RSI currently at 55, signalling a bounce from oversold conditions. Meanwhile, the MACD also confirmed strength last week with a golden cross and continues to move upward, indicating a growing bullish momentum.

A strategic entry point would be in the RM0.63 to RM0.64 range. The first resistance lies at RM0.63, and a breakthrough here could lead to testing the key neckline resistance at RM0.83. However, if the stock falls to RM0.60, a deeper correction could push prices down to the major buying volume support around RM0.53.

Entry – RM0.63 – RM0.64

Stop Loss – RM0.60

Target Price – RM0.73 – RM0.83

Source: Mercury Securities Research - 3 Oct 2024