Technical Highlights

The stock had been on a downtrend from April to September 2024. However, a significant shift occurred yesterday as it broke out of the downtrend line and closed above it, indicating a potential reversal. Furthermore, a bullish W-pattern is in the process of forming at the end of the trend and is currently approaching the neckline at RM2.21. The stock is now trading above the 20-day and 50-day EMAs, although it's still below the 200-day EMA, indicating there’s more ground to cover for a full recovery.

Momentum indicators are aligning well with this breakout. The RSI is sitting at 55, pointing to growing strength as it moves upward from neutral momentum. Meanwhile, the MACD has formed a golden cross and is trending higher. Buying volume also has spiked to its highest level since April 2024, confirming heightened investor interest.

A pullback to the range of RM2.15 to RM2.21 will be a good entry point. The first resistance to watch is at RM2.33—should it break, the stock could rally quickly to RM2.48. Exiting above RM2.48, which previously served as a consolidation zone, may be challenging and meet with strong resistance. On the downside, if the stock dips below RM1.98, it would likely resume its downtrend, leading to a larger correction.

Entry – RM2.15 – RM2.21

Stop Loss – RM1.98

Target Price – RM2.33 – RM2.47

Source: Mercury Securities Research - 4 Oct 2024