Unisem & MPI riding on the rise of SOX

A few days ago, I have posted on the bullish breakout for Unisem (go here). It has reached the target price of RM2.00-2.05 this morning. On closer examination, the strong rally in Unisem came about because it has broken above its long-term downtrend line at RM1.65-70 (see Chart 1 below). In addition, Unisem is benefiting from the continued rally in the Philadelphia Semiconductor Index (SOX)- see Chart 2 below.


Chart 1: Unisem's monthly chart as at Jan 8, 2010 (Source: Quickcharts)


Chart 2: SOX's daily chart as at Jan 8, 2010 (Source: Stockcharts)

The same bullish pattern has also developed in MPI. From Chart 3 below, we can MPI has broken above its short-term downtrend line at RM5.70 on Jan 6. The monthly chart is not as clear-cut as that of Unisem. MPI appears to have surpassed its immediate long-term downtrend line (R1-R1) while the next long-term downtrend line (RR) is still intact. This uncertainty should not cloud the positive short-term outlook for MPI. The stock is likely to rise until the next long-term downtrend line (RR). See Chart 4 below.


Chart 3: MPI's daily chart as at Jan 11, 2010_10.00am (Source: Quickcharts)


Chart 4: MPI's monthly chart as at Jan 8, 2010 (Source: Tradesignum)

Based on the above, you may like to take a look at MPI. If you have closed your long position on Unisem, you may like to re-look at the stock on pullback.