LionInd- another HIGH RISK trade?

LionInd rallied strongly to close at RM1.87 today. The strong buying was probably driven by rumors that Baosteel may be buying an undisclosed stake in Amsteel Mill Bhd for a sum of USD1 billion. For more, go here.

As a result of the sharp rally, LionInd broke above its downtrend line at RM1.65 in the afternoon. Its next resistance is the horizontal line at RM1.95 & then the psychological level of RM2.00.

Given the poor sentiment in our market presently & the sharp rally in LionInd this afternoon, this is one possible trading BUY that I would be most hesitant to recommend. If you choose to go in, be sure to put on your protective stop.


Chart: LionInd's daily chart as at June 22, 2011 (Source: Quickcharts)