Overview of Olam International
Olam International Limited engages in sourcing, processing, packaging, and merchandising agricultural products and food ingredients worldwide. The company operates in five segments: Edible Nuts, Spices & Vegetable Ingredients; Confectionery & Beverage Ingredients; Food Staples & Packaged Foods; Industrial Raw Materials, Ag Logistics & Infrastructure; and Commodity Financial Services.
According to DBS research, Olam is a leading agri-business operating across the value chain in 65 countries, supplying various products across 16 platforms to over 13,800 customers worldwide.
Olam and Muddy Water
It is important to bring out the event in 2012 when Olam share price was hit badly from an attack from short seller Muddy Water LLC. This is when Singapore state investment fund Temasek Holdings increased stake in Olam. It has also gotten Olam to win a US$1 Billion loan.
Dividend yield has been around 2.89% for 2016 and 2017.
Price had a surge recently and was queried by the Singapore Exchange on it's unusual trading activity. Olam said that Singapore state investment fund Temasek now owns 57% stake from 52% previously after converting it's warrant.
It is not known whether the increased in stake caused Olam to break out of it's 3 year high price. But report from The Edge Singapore claimed that it is a "fresh vote of confidence in Olam as said by analysts".
Price chart on Olam International
Price has been flattish for about 2.5-3 years. It mapped out an inverted head and shoulder pattern. A look at the volume behavior in this inverted head and shoulder pattern will give huge insight on whether the breakout of 3 year pattern is valid or explosive. I have included the price/volume chart here for The Alien Room subscribers only.
Important Support Resistance levels for The Alien Room subscribers
Olam International is displaying an initial breakout of it's 3 year base after Temasek increased it's stake. Historically, theoretically, a breakout of a lengthen base is going to have an impactful movement. However, is this a valid breakout and how far will price travel?
In this chart here, I marked in a support level and a resistance level which are key to this stock. These levels are identified with Tflow® Strategy.
To open this super important chart on Olam International, you need to have a valid The Alien Room subscription. Consider getting one as we have nice performance using Tflow® Strategy in Forex Trading too.
From the trading desk of Binni Ong,
to your trading success,