Technical Highlights

The stock has been forming a symmetrical triangle pattern, and it is now approaching the squeeze zone, indicating a potential breakout. This formation is similar to what we saw in early 2024, which led to a positive breakout. Adding to this, buying volume has been outpacing selling within this triangle, demonstrating increased interest from buyers. The stock is currently trading between all three key EMAs.

Momentum indicators look steady. The RSI stands at a neutral 48, while the MACD has been trending upward and recently formed a golden cross. This indicates a gradual strengthening of momentum, though it is not overly aggressive at this point. It serves as a signal that things could continue upward if conditions remain favorable.

The ideal price range right now is between RM1.75 to RM1.82, which fits within the triangle’s boundaries. The first resistance level is RM1.90, with a smaller resistance around RM1.84, potentially forming a cup and handle. If the stock can break through RM1.90, it could rally towards near the 52-week high at RM2.14. However, if it drops below RM1.68, this could indicate a downward breakout.

Entry – RM1.75 – RM1.82

Stop Loss – RM1.68

Target Price – RM1.90 – RM2.14

Source: Mercury Securities Research - 18 Oct 2024