IOI Corp’s near-term technical outlook bearish

OSK Research said IOI Corp’s near-term technical outlook remains firmly bearish as more signals are pointing towards further weakness ahead.

The research house said on Wednesday, July 14 the breakdown from the 50-day MAV line and the 100- day MAV line were the initial trend reversal signals. Not too long after that, the stock also violated the 200-day MAV line.

Last month, the stock’s 50-day MAV line crossed below the 100-day MAV line and the 200-day MAV line, which confirmed that the previous major breakdown occurred at the 50-day MAV line.

“From the current level, there is immediate resistance at the 200-day MAV line, which now lies at the RM5.25 level. Next resistance is seen at the RM5.50 level. To the downside, immediate support lies at the RM4.92 level, followed by the RM4.67 level,” it said.

On the outlook for the crude palm oil (CPO) futures, it said the market completed the massive “Double Peak” structure by violating the “Neckline” support last month.

OSK Research said as it took about six months to complete the “Double Peak”, the accuracy of this bearish reversal signal should be rather high. “We maintain our firmly bearish bias view on the near-term technical outlook of the palm oil futures market,” it added.

The price has been slowly trending lower since the “Double Peak” was created, it said. From the current level, there is a very tough resistance at the “Neckline” situated at the RM2,393 per tonne level, followed by the RM2,400 per tonne psychological level.

"To the downside, we are eyeing the recent low of RM2,270 per tonne level as the immediate support. Technically, the rebound from the recent-low is due to the support provided by an “Upside Window” created in November 2009. Next support is seen at the RM2,215 per tonne level," it said.


Written by OSK Research