IOI - from heroes to zeroes

IOI has been in the limelight for the past few months. First it was about the collapse of the CPO, then it was about their huge FX losses. This stock has been called as the "anti-gravity stock" by many of the 'experts' before its price collapsed. By "Anti Gravity" they mean it stock will stay flying high , at least holding its altitude.

Then there is the other school of thought who advocate "Buy and Hold" - Yes, IOI is one of their poster boys. Yes, everything are in there- good management, good dividends (?), bright future etc.

Please take a look at IOI daily chart and assume you are one of the fabled fantastic "buy low" artistes and you bought in IOI at around mid 2003 when KLCI bull began. Your average buying price would be around 1.20 and you practice buy and hold. IOI price took a great fall after end 2008 and gone back to its recent low of 2.08.

The question that begs to be asked is :- why don't people sell off IOI at higher prices ? Thus allowing your investment goes from 1.20 to a high of 8.60 and come back all the way of 2.08 ? It certainly does not make any sense to anybody! Of course those 'experts' would argue that IOI remains a 'good' company and they are in for the long term. But if you are holding 100 lots , please tell me did you secretly beat up your wife and children when you see it falls from 8.60 to 2.00+ ? What an emotional wreck would you have became witnessing and experiencing its great fall ?

If you practice 'Buy and Hold", your investment in IOI would have been a "from Heroes to Zeroes" classic case.

But If you have applied a little simple technical analysis on your investment, you would have done as what is shown on the 2nd chart. A simple technical analysis system which I applied here is :- buy when MACD crosses up its zero signal line and prices have to be above a mid term moving averages (anything that is more than 50 days and below 100 days - take you picks - your Fengshui numbers eg. 68,88 etc) And my stop is when RSI goes below its 50 signal line. Of course there are some whipping during a sideway market, but a small losses is anytime better than a big losses. Notice there is after July, 2008 final sell signal, there is no more no more new buy signal. This effectively allowing you to take your profit and deposit into the bank while keeping yourself amused when the 'experts' are trying very hard to "explain" what happened.