Technical Highlights

The sharp decline in the trading momentum pushed the stock into a consolidation phase from early July to late August. After hitting its trough, the stock regained momentum and started to pick up as trading interest recovered. An ascending triangle pattern was formed as the stock moved upward gradually within the zone. Yesterday, the stock closed higher with robust trading volume, edging closer to confirming a breakout from the triangle pattern. With multiple positive signals in place, we believe the breakout is imminent.

Momentum indicators are strong and in favour of the pattern breakout. The RSI remains in acceleration mode, signalling sustained buying interest. Additionally, , the golden cross formation in the MACD yesterday reinforces the short-term bullish outlook.

An ideal entry range lies between RM0.340 to RM0.350. If the stock could trigger the triangle pattern breakout, we think this could propel the stock to test the first resistance level at RM0.370. If the stock manages to break through this, it may attempt to test the subsequent resistance at RM0.430. On the downside, a dip below RM0.310 could signal a return to consolidation mode.

Entry - RM0.340 - RM0.350

Stop Loss - RM0.290

Target Price - RM0.370 - RM0.430

Source: Mercury Securities Research - 6 Dec 2024