Technical Highlights

The stock has been facing challenges in breaking above the strong resistance at RM0.560, following a downtrend. After consolidating for four months, it formed a bullish W-shaped pattern. Recently, the stock managed to break out above the RM0.560 resistance and is now trading comfortably above it. This breakout is further supported by a pullback move, with the stock trading above all three key EMAs.

Momentum indicators further support the bullish sentiment. The RSI is currently at 67, moving upward but still below overbought levels. Meanwhile, the MACD continues to trend higher. Trading volume has also surged to its highest levels since August 2024.

An ideal strategy for this stock would be to wait for a slight pullback, preferably with the stock holding above the 200-day EMA. As such, a good entry range would be between RM0.570 and RM0.590. From there, the first target would be RM0.635, with RM0.675 as the next resistance if the upward momentum continues. On the downside, should the stock fall below RM0.530, it will enter a correction phase as it will then trade below all three key EMAs.

Entry - RM0.570 - RM0.590

Stop Loss - RM0.530

Target Price - RM0.635 - RM0.675

Source: Mercury Securities Research - 16 Dec 2024