Technical Highlights

The stock recently peaked at RM0.605 before reversing to a low of RM0.475, forming a falling wedge pattern during this decline. Yesterday, the stock broke out of this wedge with notable volume, and the daily candle closed with a hammer candlestick. The stock is currently trading above the 20-day and 200-day EMAs, with the 50-day EMA emerging as the next key resistance to challenge.

The RSI is now trending upward after 50 days of neutral movement and currently sitting at 49. Supporting this, the MACD recently also formed a golden cross. With both indicators turning upward, technical signals are aligning for further upside.

An ideal strategy for this stock would be to enter between RM0.490 and RM0.500. The first resistance level to watch is RM0.530, with a secondary target at RM0.560. On the downside, a move below RM0.475 may signal a false breakout, potentially leading to a correction phase. This setup offers an attractive risk-reward ratio of 3.25.

Entry - RM0.490 - RM0.500

Stop Loss - RM0.475

Target Price - RM0.530 - RM0.560

Source: Mercury Securities Research - 18 Dec 2024