Tuesday, September 25, 2012

Iofina PLC - BUY

Iofina PLC shares (LSE:IOF) are expected to continue going up from the upward breakout that occurred on August 24, 2012. Brave speculators stand a chance to harvest financial rewards from this market. The present price situation is testing the courage of investors and traders, no matter the type of trading approach and knowledge possessed.
Normally, a market bias happens in retrospect. The analysis of a bias for today and tomorrow is merely a game of possibilities. Yet, it is possible that the trend will continue upwards.

Technical Forecast
The stock had been trading in a tight range prior to the current bullish run. From June 2012 the price started to consolidate to the upside, and the upside effort turned into a bullish breakout, starting from August 24, 2012. This new bullish trend has held its ground since then. For this technical analysis, Average Direction Movement Index (ADX) period 14 and MACD (default parameters) are used. The ADX 14 is above the level 40, showing that the current uptrend is strong. It might even go to levels 50, 60 and 70. The ADX +DI is far above its -DI counterpart - which shows a serious bullish pressure. Moreover, the MACD histogram and signal lines are all clearly above the level zero. What we have on this chart is a Bullish Confirmation Pattern. As long as this pattern is in place, the market will continue to rally.

As this forecast was being prepared, the stock was trading at 70. The nearest support lines are 60.50 and 60.00, which are expected to check immediate bearish attempts. The nearest resistance lines are 80.00 and 80.50, which are expected to be violated as the bullish attempts continue. Though humans have a far-from-perfect record when it comes to guessing the future, the probability exists that this market would continue upwards. You would need to ride this bullish trend for as long as possible. Do not be in a hurry to sell this stock: haste is slower than patience.

Conclusion: The signal we have on Iofina is BUY. 80% to 20% statistical possibilities are present in the financial markets. Most of our gains are realized from a few winning positions that are allowed to run. The colossal gains of a few positions are realized from those who speculate indiscriminately on too many stocks and end up damaging their portfolios. By picking your stocks carefully, you have a better probability of having average winners that are bigger than average losers.  You should bear it in mind that the type of chart analysis used here shows that the northward pressure is bound to continue. Having said so, this means that shrewd speculators may want to open long positions only in the direction of the trend, trusting that the present market bias will hold.

This article is ended with the quote below:

“Trading for a living involves more than getting in and out of the market at the right time, and more than thinking about moving averages and indicators. Trading is a business, not just a job, and every business in the world has to be managed. Every business involves the managerial functions of organizing, planning, delegating, directing, and controlling. If you, the trader, are to perform these functions well, you must learn to practice self-discipline and self-control.” - Joe Ross

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Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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