Sapcres- a Trading Idea

Sapcres is one of the largest Oil Services company in Malaysia. Its results for 3Q2009 ended 31/10/2008 shows the net profit has increased by 10.6% q-o-q or 58.3% y-o-y to RM36.9 million. Turnover has jumped by 74.7% q-o-q or 69.2% y-o-y to RM1.05 billion.



From the chart below, we can see that Sapcres' price movement nearly mirrors the Philadelphia Oil Services index (or, OSX), with two notable differences. Firstly, the OSX made a lower 'low' in December 2008 which Sapcres managed to avoid. Secondly, OSX made a higher 'high' in January 2009 (compared to November 2008 'high') which Sapcres failed to do. The OSX looks set for further recovery-- probably awaiting a reversal in Crude Oil prices-- and the same probably applies to Sapcres.


Chart: Sapcres & OSX's daily chart as at Jan 9, 2009 (source: Tradesignum.com & Stockcharts.com)

Based on the above, I think Sapcres could be a good proxy play for a reversal in Crude Oil prices. Good entry level for this stock is at RM0.80-85.