Technical Highlights

The stock has been in a downtrend since May, given the lack of strong new catalysts. Yesterday, a surge in buying volume pushed the stock higher, breaking out of the triangle pattern it had been consolidating within. This breakout also saw the stock moving above its 20-day EMA line, signaling the build-up of short-term bullishness. We expect some rebound momentum as bargain-hunting activities pick up post the recent portfolio rebalancing by fund managers after the stock's removal from the FBM KLCI index.

Momentum indicators are supportive of the positive outlook. The RSI is looking strong and accelerating, signaling a resurgence in trading interest. Meanwhile, the upward- pointing MACD line confirms the build-up of positive momentum in the stock.

For an ideal entry point, it can be set in the range between RM2.13 and RM2.15. The first resistance to watch is at RM2.18. A breakout above this level could position the stock to challenge its subsequent resistance at RM2.30. Conversely, if the stock moves sideways toward and below RM2.05, it could signify a false pattern breakout, potentially leading to a consolidation toward RM1.95.

Entry - RM2.13 - RM2.15

Stop Loss - RM1.98

Target Price - RM2.18 - RM2.30

Source: Mercury Securities Research - 24 Dec 2024