KUALA LUMPUR (March 21): Rakuten Trade said Tomei Consolidated Bhd may trend higher after breaking out from its one-week bullish flag pattern on Wednesday.
In a technical view note on Thursday, the research house said that in view of the stock pulling further away from all the exponential moving average (EMAs) with its 20-day EMA starts pointing upward, thus suggesting that its bullish momentum is picking up further.
“We expect the rising momentum is set to steer the stock higher, and test the next level of resistance of RM1.47 (R1), followed by RM1.53 (R2) in the near term.
“On the downside, stop-loss is set at RM1.22 below the Feb 16 low,” it said.
Rakuten said that fundamentally, Tomei stands to gain from the recent surge in global gold prices.
“With its strategy of consistently replenishing inventory without engaging in speculation on gold prices, Tomei is well positioned to benefit from the elevated gold price, which is expected to drive margin expansion for the company until older inventories are fully sold,” it said.