Technical Highlights

Between September 2023 and March 2024, the stock went through a broad-based correction as buying interest waned. After bottoming out, it staged a gradual recovery, but this momentum was interrupted by multiple smaller correction phases. Last Friday, the return of strong buying interest (8.2x higher than its average 90-day trading volume) triggered a breakout from a triangle pattern, with the stock closing above the key resistance level of RM0.390. We think this breakout lays a solid technical foundation for the stock to revisit its 52-week high.

Momentum indicators are supportive of the upward trend. The RSI reaccelerates after a period of side-way movements, signalling that the buying interest remains favourable. Similarly, the recent exhibition of a golden cross in the MACD further confirms the bullish outlook for the stock.

For entry, a good range to consider would be between RM0.380 to RM0.400. The first resistance to watch is RM0.415, and if it breaks through, the stock could challenge its 52-week high at RM0.465. On the downside, if the stock falls below RM0.340, it could indicate a false breakout and invalidate the upward trend, potentially leading to the start of a correction. .

Entry - RM0.380 - RM0.400

Stop Loss - RM0.330

Target Price - RM0.415 - RM0.465

Source: Mercury Securities Research - 28 Jan 2025