Technical Highlights

The stock formed a bearish M-shaped pattern but has managed to hold above the key support zone at RM1.04. It has since bounced back, gaining over 10%, which indicates a potential reversal of the bearish trend. Furthermore, the stock has broken out of its downtrend recently and is currently trading above the 200-day EMA. However, it is now approaching a challenge with the 20-day and 50-day EMAs, which may act as resistance levels in the short term.

Momentum indicators are also looking good. The RSI has risen from 32 to 44 and continues to head upward. Similarly, the MACD is on the verge of forming a golden cross, provided buying momentum sustains in the coming week.

An ideal entry point for this stock would be between RM1.14 and RM1.17, with the first resistance at RM1.23. If the stock successfully breaks this resistance, the next target would be RM1.30, followed by RM1.43 if buying pressure persists. Conversely, if the stock falls below RM1.04, it could indicate a false breakout and could move downward toward the previous consolidation zone near RM0.90.

Entry - RM1.14 - RM1.17

Stop Loss - RM1.04

Target Price - RM1.23 - RM1.30 - RM1.43

Source: Mercury Securities Research - 21 Jan 2025