Plantation stocks- good for a trade

The sharp rally in CPO is beginning to stir up interest in plantation stocks. Among the stocks which may have bullish breakout are IJMPlant & IOICorp.


Chart 1: CPO's daily chart as at August 5, 2010 (Source: ifs.marketcenter.com)

IJMPlant has broken above its descending triangle at RM2.45-2.50. The breakout is however lacking in volume. If it can recruit sufficient buying support, it may rally & possibly test the horizontal line at RM2.93-95. See Chart 2 & 3 below.


Chart 2: IJMPlant's daily chart as at August 6, 2010_3.30pm (Source: Quickcharts)



Chart 3: IJMPlant's weekly chart as at August 6, 2010_3.30pm (Source: Quickcharts)

IOICorp has broken above its medium-term downtrend line at RM2.14 as well as to the upside of its triangle at RM2.15. Like IJMPlant, this breakout is also short on volume. If the buying picks up, it may test its long-term downtrend line at RM2.18-2.20. If the latter can be overcome, IOICorp may rally to test its horizontal resistance at RM6.20.


Chart 4: IOICorp's daily chart as at August 6, 2010_3.30pm (Source: Quickcharts)



Chart 5: IOICorp's weekly chart as at August 6, 2010_3.30pm (Source: Quickcharts)

Based on the above technical breakout for IJMPlant, one may consider taking some position in this stock. For IOICorp, you should watch out for the upside breakout above the long-term downtrend line at RM5.18-20 before venturing in.