HWL-C1 could be a good trading BUY

Today is the first day of trading for HWL-C1, a call warrant issued by CIMB for the underlying share of Hutchison Whampoa Ltd ("HWL"). The main terms for HWL-C1 are:

1. Exercise Price: RM34.25 (or HK$77.84, assuming exchange rate of HK$1 : RM0.44)
2. Tenor: 6 months from issue date (June 22, 2007)
3. Exercise Ratio: 10 to 1

HWL share price gained HK$3.40 to HK$86.40 as at 4.02 p.m. today. As a result, HWL has surpassed its recent high of HK$83.00 recorded in January this year. With this bullish breakout, I believe HWL should have further upside (see the chart below). To check on HWL share price, you can go here. HWL's stock code 13.



Chart: HWL's daily chart as at July 6 (courtesy of HKEX)

Based on the breakout of the underlying share, HWL-C1 could be a good trading BUY.

This is strictly a technical call without any consideration of the company's financial performance & position.