Sarawak Oil Palms

Hello traders,

Recently, a family member of mine seeked my opinion on a malaysian counter, Sarawak Oil Palms Berhad (SOP) – 5126.kl. She has been holding it for a long time, and is wondering what the charts are telling me.

SOP traded in an upward parallel channel throughout the whole of last year. Late in November, strong buying interests pushed SOP out of the parallel channel. The steep climb ended in April of this year with SOP just missing the RM7.00 level. A quick dive down to RM5.80 got my family member worried! But, the recent climb back above RM6.00 brought some respite.

Initially, I told my family member that it does not matter where you get out. She bought into this counter a long time ago at a very low price. Probably on a broker’s tip or something similar. I told her, “Ten, twenty years down the road, after you have cashed out at RM6.00 from an entry at below RM2.00, you will not care if SOP had gone on RM7.00 or even RM8.00! You made a ton of money on a long-term buy-and-hold investment. Unless, of course, if SOP does climb to more than RM15.00 or RM20.00, then I guess you can only tell your friends how you missed out on a humongous potential profit!”

So, with SOP breaking new highs by the week, I told my family member to sell off as soon as possible if she was not comfortable with the risks. But, as a chartist, I said that she could also tahan some risk and ride the uptrend while it was intact. Weeks passed and suprisingly, SOP developed an interesting event on the chart – an unconfirmed head and shoulders. It is quite nicely defined with 3 clear regions of price action. All that is left is a breakout to give me a technical signal. Volume behaviour is quite ideal; declining volume in general, with a slight spike leading into the right shoulder. It will be interesting to see how this goes.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.


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