Technical Highlights

The stock had been trading below all its EMA lines after reaching its 52-week high, entering a consolidation phase. It showed multiple attempts of recovery but were unsuccessful as the buying interest was not strong. However, a shift in sentiment occurred recently as renewed buying interest drove the stock to break through the pennant pattern. While initially unconvincing as the stock still trading below all its EMA lines, yesterday’s significant close above the 20-day EMA confirmed a strong signal for trend reversal.

Momentum indicators are looking favourable and supportive of the trend reversal, with both the RSI and MACD moving upward, suggesting growing strength and the start of bullish uptrend movement.

For an ideal entry point, investor can look at the range between RM0.38 to RM0.40. The first resistance level to watch is RM0.430. If the stock can break through this level, the next target would be at RM0.455. Conversely, if the stock drops below RM0.380, it would indicate a false trend reversal and the start of consolidation phase.

Entry – RM0.380 – RM0.400

Stop Loss – RM0.330

Target Price – RM0.430 – RM0.455

Source: Mercury Research - 11 Oct 2024