Trading idea - GuangZhao IFB

GuangZhao IFB is on course to clear 36-37 cent resistance and move back to 40-45 cent highs.

Price :$0.35
Support 32 cents
Resistance 40 cents
TP 42 cents

The July and September/early October rallies to new peaks of 45-
46.5 cents were active periods while the August and last month’s
correction phases did not see widespread selling.

Since the last Nov 20 low of 27 cents, the stock has appreciated
gradually on quiet trading but turnover rose well to 6.15m shares
yesterday as it moved up from 33 to 35.5 cents at the low end of the
earlier 35-40 cent support area.

The 19 and 39 days MAs are signalling a likely golden crossover in
the days ahead and if volumes rise further, last year’s 36-37 cent
highs should be taken out and GIFB move quickly to 40 cents.

The MACD which has cut its signal line remains in oversold territory
and while the RSI is neutral, this should not hamper the stock’s
steady appreciation. It has already recovered to above the 62%
mark of 32.5 cents between 46.5 peak and 10 cent record low.

This should pave the way for a full upward retracement to 45-46.5
cents which may well come in the next month or 2 in view of the
average 10 week gap between the 45 cent peak towards end-July
and 46.5 cents in early October.

GIFB has put up a respectable showing this year climbing from 13
cents at end-2006 and when the August plunge set in, it still
managed to hold on to the 38% fibonacci mark of 24 cents. Last
month’s correction stopped at the half way mark of 27-28 cents.

Thus the medium term momentum is still strong enough to propel it
back to above 40 cents with support now strong at this month’s 32
cent low.