Technical Highlights

The stock slipped into consolidation mode as trading momentum cooled off substantially between late May and late August. Renewed buying interest gradually lifted the stock higher, though weak momentum-reflected in the sideways RSI movement-kept the stock in a range-bound pattern. Recently, the indication of a sideways pattern breakout became clearer when buying interest rebounded sharply, leading to a breakout from the falling wedge pattern.

Momentum indicators are supportive of the breakout. The RSI is hovering in the neutral zone, showing sustained buying interest. Similarly, the stock's bullish outlook is strengthened by the recent exhibition of golden cross in the MACD.

Waiting for the stock to pull back to the range between RM1.26 and RM1.29 presents a good entry opportunity. With the pattern breakout accompanied by sustained trading momentum, this would form a stage for the stock to challenge its first resistance at RM1.30. A successful breakout here could push the stock to challenge the next resistance levels at RM1.35 and RM1.43 respectively. Conversely, a dip below the critical support at RM1.22 could signal a false breakout, leading to a return to consolidation phase.

Entry - RM1.26 - RM1.29

Stop Loss - RM1.17

Target Price - RM1.30 - RM1.35 - RM1.43

Source: Mercury Securities Research - 12 Nov 2024