Thursday, November 04, 2010

HSBC's next upleg may have started

HSBC rose HK$3.00 (or, 3.6%) to close at HK$85.50. This mirrored a similar strong move in NYSE where it gained USD1.15 (or, 2.18%) to close at USD53.91. From the chart below, we can see that HSBC broke above its reverse Head-&-Shoulder formation at USD52.50. This means that HSBC is likely to commence its upleg soon.


Chart: HSBC's daily chart as at Nov 3, 2010 (Source: Stockcharts)

For the chart of HSBC as traded in HKEX, go to Yahoo Finance.

Based on the above, you can consider the 2 CWs of HSBC listed on our exchange. The terms & valuation are as follows:


Table: HSBC's CW valuation

I prefer HSBC-C7 for its longer tenor. However, HSBC-C6 also has its attractions, such as lower premium & higher gearing.
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10 comments:

  1. MaxWealth88Thursday, November 04, 2010 5:27:00 PM

    hi alex,

    TSM corrected a bit after bonus issue announcement. Do you think is a buying opportunity?

    thanks
    maxwealth88

    ReplyDelete
  2. Roger HoFriday, November 05, 2010 12:01:00 PM

    Hi Alex,

    What are the counters on Bursa Malaysia that we can leverage on HSBC share listed on HKSE ?

    Have a great weekend.

    Kind regards

    Roger

    ReplyDelete
  3. UnknownSunday, November 07, 2010 1:35:00 PM

    HI Alex,

    can i know what system you use to monitor all this charts and also if this system prompt you on break out.

    ReplyDelete
  4. K CMonday, November 08, 2010 10:54:00 AM

    Hi Alex,
    I prefer C6 because of the leverage of 25 times! One can make big in this kind of gearing. Of course one can lose big too. but the maximum one loses is the price you pay for but upside is unlimited. Moreover, if you use option pricing model, be it Binomial or Black-Scholes, C6 is undervalued by 10%.

    ReplyDelete
  5. NightwatchmenTuesday, November 09, 2010 11:08:00 AM

    Hi Alex,

    Can u give your comments for Hubline and iris? Thks

    ReplyDelete
  6. Alex LuWednesday, November 10, 2010 12:13:00 PM

    Hi MaxWealth88


    TSM is still a good buy if it corrected back a bit more. Ideally, you should aim for the horizontal line support of RM3.60 but it may not go that far. You may start nibbling at RM3.80-3.90.

    ReplyDelete
  7. Alex LuWednesday, November 10, 2010 12:15:00 PM

    Hi Roger Ho

    The only way to play the developing uptrend in HSBC on Bursa is by buying HSBC-C6 or HSBC-C7.

    ReplyDelete
  8. Alex LuWednesday, November 10, 2010 12:17:00 PM

    Hi William

    It may disappoint you to learn that I do not have a scientific way of tracking stocks. In my free time, I would look at many stocks that I like & when something registered, I would then track them from time to time. When a breakout happened, I would call a BUY.

    ReplyDelete
  9. Alex LuWednesday, November 10, 2010 12:18:00 PM

    Hi K C

    I agree with your take on HSBC-C6. The important qualifier which you have rightly noted is the higher risk involved. Good luck.

    ReplyDelete
  10. Alex LuWednesday, November 10, 2010 12:22:00 PM

    Hi nightradersdk

    Technically speaking, I would prefer to trade Iris than Hubline. Hubline is still in a downtrend with no sign of a possible rally. Iris has broken above its medium-term downtrend & is in a short-term rally with could potentially retest its May 2009 high of RM0.22.

    Please check on their financial statements by going to Bursa website.

    ReplyDelete