Tuesday, February 18, 2014
Scomies or Scomi- which one is a better bet?
Over the weekend, we read that Quek Leng Chan has acquired a stake in Scomi Energy Services Bhd ('Scomies'). His stake is about 3.4% while a friendly party, Paul Poh also acquired a 4.6%-stake in Scomies. What is Quek's intention in regards to his investment in Scomies? Is it a speculative investment or is it a strategic investment?
We can see from Chart 1 below that Scomies has been trending higher quite nicely over the past 2 years after it broke above the 'horizontal line' at RM0.35 in the middle of 2012. With the recent breakout of the psychological level of RM1.00, Scomies may continue its uptrend. It could potentially hit the RM2.00 mark.
Chart 1: Scomies's weekly chart as at Feb 18, 2014 (Source: Tradesignum)
Meanwhile, Scomi group Bhd ('Scomi'), which owns 65%-stake in Scomies, also rallied yesterday and today. From Chart 2 below, we can see that Scomi has strong resistance at the horizontal line at RM0.44-0.45. this morning it broke above the strong resistance. At the time of writing, scomi is pressing against the next resistance is at RM0.50. Can it charge through that resistance?
Chart 2: Scomi's weekly chart as at Feb 18, 2014 (Source: Tradesignum)
Based on newsflow and positive technical outlook, both Scomi & Scomies could be good trading BUY, especially if they pullback a bit towards the breakout level (of RM0.44-0.45 for Scomi & RM1.00 for Scomies).
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Scomies & Scomi.