IOI Corp

IOI Corp has moved up together with price of palm oil. Since breaking out of the resistance of RM 4.00, this counter has gained RM 0.40 to close at RM 4.40. Not bad for a one month gain.

The counter is processing the high of RM 4.48 set in 7 Jan 2009. MACD indicator is about to go above its signal line. This is an indication that there may further strength in this rally. ADX is approaching 40 level with +DI above the –DI, another bullish indicator.

RSI is moving down from overbought level. However, so long as price stays above RM 4.20, the upwards momentum should be sustainable.

IOI Corp

IOI corp closed at RM 3.78 on Friday.

The stock price is now sitting near the 20 day moving average. The stock price looks to be forming a pivot point at RM 3.68 level.

The fast stochastic line is about the slow stochastic line. Once the fast stochastic line cuts above the slow stochastic line, it indicates short term strength and a possibility of a short term rebound from current levels.

If RM 3.68 is not broken today, it will most likely test RM 4.00 level soon.

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.

IOI Corp

IOI Corp has been affected by the fall in palm oil prices. The price is now near the lower Bollinger Band.

The –DI is slightly above the +DI with the ADX decreasing from a high level indicating that the down trend is slowing down.

MACD line is about to cut the MACD Signal line which bearish if the cutover occurs. However, if the stock price is able to rebound from current levels, there is likelihood that we will see divergence in MACD as well as RSI. Divergence usually indicates a reversal in trend.

IOI Corp

Palm oil stocks have been sold down for the whole of last week. This drop coincides with the drop in crude oil prices.

Looking at the chart of IOI Corp, we can see that the trend is clearly downwards. The ADX is approaching the 40 level and the –DI is higher than +DI by a considerable amount. This indicates a potential for a strong down market.

The MACD is also painting a negative picture with the indicator below its signal line.

The stock is clearly oversold going by the RSI indicator. However, oversold market doesn’t mean the stock will rebound and going by the negative sentiment so far, any rebound should be seen as an opportunity to get out of this stock.

IOI Corp Bhd (Symbol: 1961) Case Study

Today I will do a case study on IOI Corporate Bhd (Symbol: 1961). This is an investment holding company that deals with palm oil and rubber.

This stock closed at RM7.55 on Monday. This stock has made a transition from down trend to uptrend.

The price is currently above the 10 day simple moving average, 20 day exponential moving average and 30 day exponential moving average respectively. The last bar on the chart showed a Harami candlestick pattern.

The price managed to bounce off its 10 day simple moving average yesterday which is a good sign.

You can use the method described in my earlier post
HAI-O Case Study to trade this stock.

The trading result for the method when applied to this stock is as follows:

Entry Date	Entry Price	Exit Date	Exit Price	% Change	Bars Held
6/9/2003	1.03	8/5/2003	1.14	10.68	41
2/24/2004	1.73	4/15/2004	1.89	9.25	37
7/9/2004	1.7	7/15/2004	1.65	-2.94	4
8/27/2004	1.7	10/20/2004	1.83	7.65	38
12/27/2004	1.88	12/29/2004	1.89	0.53	2
4/15/2005	1.82	5/18/2005	1.83	0.55	23
6/16/2005	1.92	11/15/2005	2.54	32.29	108
1/11/2006	2.52	1/24/2006	2.5	-0.79	9
4/25/2006	2.84	5/23/2006	2.94	3.52	20
7/10/2006	2.98	9/7/2006	3.28	10.07	43
10/25/2006	3.34	12/15/2006	3.72	11.38	37
1/10/2007	3.74	1/19/2007	3.68	-1.6	7
3/29/2007	4.28	6/5/2007	5.55	29.67	48
9/11/2007	5.35	11/23/2007	6.85	28.04	53
2/18/2008	8	3/4/2008	7.9	-1.25	11
4/23/2008	7.5	Open	Open	-0.67	3

The simulation data is from 2003 to 28 May 2008. In total there were 16 trades with 11 winners and 4 losers. The trade on 23 Apr 08 is still active. Lets see how this trade will turn out.