Technical Highlights

The stock entered a consolidation phase in mid-April, experiencing a significant decline from its 52-week high. Recently, however, it has shown signs of regaining strength, gradually inching upward from its low. Multiple breakout attempts from the downtrend resulted in the formation of a flag pattern. Yesterday, a resurgence in buying interest pushed the stock to close higher at RM0.655, positioning it right on the verge of breaking through the flag pattern. A breakout from this level could act as a catalyst for a stronger upward move, signalling further upside potential.

The momentum indicators are positive and support the pattern breakout. The RSI rebounded strongly from the oversold territory, signalling the return of buying pressure. Similarly, the golden cross displayed in the MACD yesterday further confirms the sustained positive momentum in the stock.

Waiting for a slight pullback to the RM0.645–RM0.655 range could provide an ideal entry point. If the stock breaks out of the flag pattern with sustained momentum, it will gain strength to challenge its first resistance at RM0.675. A successful breakout above this level could propel the stock toward the next resistance at RM0.725. Conversely, if the stock falls below its support at RM0.625, it may enter a consolidation phase.

Entry – RM0.645 – RM0.655

Stop Loss – RM0.625

Target Price – RM0.675 – RM0.725

Source: Mercury Securities Research - 16 Oct 2024