Technical Highlights

The stock peaked in May 2024 at RM0.495, marking its 52-week high before entering a prolonged downtrend that saw it hit a new 52-week low of RM0.250. Throughout this period, the stock traded within a consolidation zone, forming a clear triangle pattern, with the price now squeezing into a tight range, a breakout from this will be around the corner. Adding to this positive outlook, the stock is now trading above both the 20-day and 50-day EMAs, and if the momentum continues, a bullish crossover between these two EMAs could occur soon. However, the stock is still trading below the 200-day EMA.

Momentum indicators are looking good. The RSI is currently at 56, steadily moving higher and reflecting improving buying interest. Meanwhile, the MACD has also started to move upward after two months of neutral momentum.

An ideal entry point for this stock would be in the RM0.270 to RM0.280 range. The first resistance to watch is RM0.285, which is near the recent closing price. If the stock breaks through this level, the next resistance would be at RM0.310. If the buying momentum remains strong, the stock could climb toward RM0.340. On the flip side, if the stock falls below RM0.250, it would indicate a shift back to a downtrend, as RM0.250 has been a critical support level since May 2024. Additionally, a break below this level would also breach the macro bullish uptrend line that has been holding since 2020.

Entry - RM0.270 - RM0.280

Stop Loss - RM0.250

Target Price - RM0.285 - RM0.310 - RM0.340

Source: Mercury Securities Research - 9 Jan 2025