Technical Highlights

After reaching its 52-week high in early July, the stock entered a mild correction phase before beginning a recovery, driven by strong buying interest. Recently, the stock started to consolidate within a range, leading to the formation of a falling wedge pattern. Yesterday, the strong buying interest pushed the stock to close higher and nearing a breakout from the falling wedge pattern. With buying interest looking strong, we think the stock will likely breach the pattern and be followed by an upward trend movement.

Momentum indicators are supportive of the pattern breakout. The RSI is rebounding, indicating strong buying interest is accumulating. Meanwhile, the golden cross displayed in the MACD yesterday further confirms the build-up of positive momentum for the stock.

Waiting for a slight retracement to the price range between RM0.400 and RM0.410 represents a good entry opportunity. The first resistance is set at RM0.430, and if the stock breaks this level, it could challenge RM0.465, a point that serves as both a crucial resistance level and its 52-week high. Conversely, a dip below RM0.370 could indicate the start of a consolidation phase.

Entry - RM0.400 - RM0.410

Stop Loss - RM0.340

Target Price - RM0.430 - RM0.465

Source: Mercury Securities Research - 10 Dec 2024