Technical Highlights

The stock has been moving in a downtrend since 2023, reaching its bottom in June 2024. Since then, it has started to rebound steadily. Notably, we have identified a symmetrical triangle pattern forming, and last week, the stock broke out from this pattern in the squeeze zone, gaining 5.2% by the closing. This upward movement may have been influenced by the company's recent announcement of securing exclusive rights to bring in the Luckin Coffee chain. Additionally, the stock has moved above all three key EMAs, signalling strength in its trend.

Momentum indicators further reinforce this positive outlook. The RSI currently stands at 74 and continues to move upward. Likewise, the MACD confirmed a golden cross last month, reinforcing the positive trajectory. Moreover, buying volume has surged to its highest level since May 2023.

An ideal entry point lies between RM0.485 to RM0.500 range, particularly after a slight pullback. The first resistance is at RM0.530, and a breakout above this level could see the stock testing RM0.565. If both levels are surpassed, there is potential for the stock to reach RM0.620. On the downside, a dip below RM0.440 would invalidate the breakout and likely initiate a correction phase.

Entry - RM0.485 - RM0.500

Stop Loss - RM0.440

Target Price - RM0.530 - RM0.565 - RM0.620

Source: Mercury Securities Research - 2 Dec 2024