Technical Highlights

The stock experienced correction after touching its 52-week high in early August. However, the correction phase was short-lived as it only lasted for less than a month. Recovery kicked off swiftly as buying interest grew gradually. With the stock trading in a pattern of higher highs and higher lows, supported by sustained buying interest, we believe this positions the stock for a potential channel pattern breakout in the near term.

Momentum indicators are showing strength, supporting the potential breakout. The RSI continue to trend upward towards overbought territory, signalling sustained buying interest. Likewise, the MACD displayed a golden cross yesterday, further confirming the build-up of the stock's positive momentum.

The RM2.37-RM2.39 range presents an attractive entry point, especially following a minor pullback. The first resistance at RM2.45 serves as a crucial level, acting as both resistance and the trigger for the potential pattern breakout. A decisive move above RM2.45 could propel the stock toward its next target at RM2.51, with further upside potential to RM2.60 if momentum sustains. On the downside, a breach below RM2.29 would signal a reversal and likely initiate a consolidation phase.

Entry - RM2.37 - RM2.39

Stop Loss - RM2.24

Target Price - RM2.45 - RM2.51 - RM2.60

Source: Mercury Securities Research - 17 Jan 2025