Technical Highlights

The stock peaked at RM3.31 in May 2024 and has since declined, reaching its 52- week low of RM2.20. Following a 50-day period of consolidation in a tight range, the stock broke out from this downtrend with the highest buying volume seen since May 2024. Currently, the stock is about to challenge the 20-day EMA, but it remains below both the 50-day and 200-day EMAs.

Momentum indicators are looking good. The RSI is currently at 42 and moving upward, indicating improving sentiment. Additionally, the MACD has formed a golden cross on the weekly timeframe this week, further supporting the potential for a sustained bullish move in the coming sessions.

An ideal entry point for this stock would be in the RM2.35 to RM2.40 range. The first resistance level to watch is RM2.56, and a successful breakout above this could lead the stock to rally toward RM2.82. On the flip side, if the stock trades below RM2.20, which also marks the 52-week low, this could indicate a false breakout and a continuation of its downtrend.

Entry - RM2.35 - RM2.40

Stop Loss - RM2.20

Target Price - RM2.56 - RM2.82

Source: Mercury Securities Research - 23 Jan 2025