Technical Highlights

The stock has been on a downtrend since July 2024, reaching a bottom in September. Since then, it has moved within a consolidation zone, forming a triangle pattern. Yesterday, the stock attempted a breakout from this triangle with the highest buying volume since October, but ultimately closed below the triangle line. As the stock approaches the squeeze zone, it presents a key area to monitor for potential breakout. Currently, it is trading above its 20-day and 50-day EMAs, which are on the verge of crossing but remain below the 200-day EMA.

Momentum indicators also paint a favourable picture. The RSI is currently at 62, leaving room before reaching the overbought level. Meanwhile, the MACD formed a golden cross last week and is still trending upward, further supporting a positive outlook.

An ideal strategy for this stock would be an entry between RM0.570 and RM0.590, with the first resistance at RM0.620 and a second resistance at RM0.670, a level where the stock previously reversed downward. On the flip side, if the stock moves below RM0.545, it could indicate a false breakout and the start of a downward trend.

Entry - RM0.570 - RM0.590

Stop Loss - RM0.545

Target Price - RM0.620 - RM0.670

Source: Mercury Securities Research - 31 Dec 2024