Sunday, September 28, 2008

IOI Corporation

All eyes will be on whether the US government is able to agree on a bailout package this Sunday. Although the bailout package may not be able to solve the current economic problems, failure to agree on a bailout package will definitely be negative for the stock market.

Commodities related counter have been affected by the expected slow down in the global economy which will result in lower demand and hence lower commodity prices. IOI Corp has not been spared the down swing as well.

The chart is looking better compared to a few weeks ago.

The MACD line has cut above its signal line, indicating a possible up move. There is also a divergence between price and MACD line.

Another promising sign is the decline that started from 23 Sep occurred with diminishing volume.

One possible way of playing this stock is to wait for a breakout of RM 4.86. This will reinforce the MACD divergence signal. Once entered, the stop loss level can be set at RM 4.36.

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