Technical Highlights

In mid-July, a sharp correction driven by a plunge in buying interest sent the stock to its 52-week low. Since then, renewed buying interest has spurred a gradual recovery. However, the stock's recovery appeared weak, as it failed to break out of the downtrend despite multiple attempts. Recently, stronger buying interest has driven the stock upward, breaking through the triangle pattern. This breakout, coupled with the formation of a traditional W pattern, suggests a solid trend reversal.

Momentum indicators are favourable and supportive of the trend reversal. The RSI has hooked up sharply towards the overbought zone, indicating sustained buying interest. Similarly, the bullishness of the stock is further ascertained by both the upward-pointing 20-day EMA and MACD lines.

A good entry opportunity lies between RM0.325 and RM0.335. The first resistance level to monitor is RM0.34, a recent high for the stock. A successful break here could position the stock to challenge the next resistance at RM0.39, with further upside potential toward its 52-week high at RM0.43. Inversely, if the stock dips below the crucial support level of RM0.325, this could signal a false trend reversal, leading to the commencement of the consolidation phase.

Entry – RM0.320 – RM0.330

Stop Loss – RM0.295

Target Price – RM0.34 – RM0.39 – RM0.43

Source: Mercury Securities Research - 8 Nov 2024