Wednesday, July 27, 2011

SOP- breaking to the upside (on more than one level)

Take a look at SOP's daily chart (Chart 1) & the weekly chart (Chart2) below. Do you see the difference? Let me rephrase it: Do you see the similarity between the two charts? Amazing, but true! SOP is breaking above the saucer formation, both on the daily chart as well as on the weekly chart! In addition, it is breaking above its all-time high of RM4.22!

SOP is involved in oil palm cultivation. Based on its results for QE31/3/2011 (here), SOP is now trading at a PE of 8.3 times (based current price of RM4.24 & annualized EPS of 51.36 sen).

Based on the above technical breakout (not the beauty of the charts), I believe SOP could be a good trading BUY.


Chart 1: SOP's daily chart as at July 27, 2011_4.30pm (Source: Quickcharts)



Chart 2: SOP's weekly chart as at July 27, 2011_4.30pm (Source: Quickcharts)



Chart 3: SOP's monthly chart as at July 1, 2011_plotted on log scale (Source: Quickcharts)

"Onions have layers. Ogres have layers. Onions have layers. You get it? We both have layers."
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17 comments:

  1. AnonymousWednesday, July 27, 2011 5:09:00 PM

    Dear Alex

    Can you comment on OKA prospect?. Based on its Q4 result, OKA have record much better result due to improve profit margin, could these stock deserve better valuation?

    Remarks: OKA also currently trade cum dividend of 3sen TE

    ReplyDelete
  2. MaxWealth88Wednesday, July 27, 2011 9:44:00 PM

    hi alex,

    can you pls review OSK?

    thanks
    maxwealth88

    ReplyDelete
  3. AnonymousThursday, July 28, 2011 9:36:00 AM

    Hi Alex

    Do you have investment idea on AIRB. These water concessionaire stock have very high dividend yield and its cash holding almost worth RM 1.00/share, what should be fair valuation for AIRB?

    ReplyDelete
  4. FlorenceThursday, July 28, 2011 11:52:00 AM

    Hi Alex, good morning. What is your view about CIMB this counter?JP morgan having the analysis as follow:

    We think the current CIMB share price offers a good entry point. Three
    reasons: 1) The bank will likely surprise positively on domestic margins
    (read-through from Public Bank results), 2) Indonesian ownership issues
    are priced in (stock down 6% since the news), and 3) CIMB has lagged
    Indonesian banks YTD, which should partly reverse. CIMB is our top pick
    amongst Malaysian banks, with 20% upside potential to our Jun-12 PT of
    M$10 (DDM derived). We are adding the stock to our Asia Analyst Focus
    List. Maintain OW.

    ReplyDelete
  5. tanThursday, July 28, 2011 5:15:00 PM

    hi alex,

    scable has mark over rm2. what is your views on this penny stock.it had rise steadily since june 21,would it be a good buy when it dip below rm2?.probably it will be flying higher once over rm2.

    tan

    ReplyDelete
  6. Chun MunThursday, July 28, 2011 8:42:00 PM

    Hi Alex,
    What do you think about AMEDIA and CATCHA. CATCHA is now lower than the IPO price and I start seeing the major share holder repurchase the stock. AMEDIA is moving around 2.6 -> 2.8.

    ReplyDelete
  7. BuyerThursday, July 28, 2011 10:37:00 PM

    Hello Alex,

    Would you mind to advise

    1) What is the time frame should we refering when performe TA?

    2) How to select between daily and weekely chart? Daily chart for trading buy? and Weekly for medium term?

    Thanks in advance

    Regards,
    Buyer

    ReplyDelete
  8. leslieroycarterFriday, July 29, 2011 12:46:00 PM

    Hi Alex:
    Under the prevailing circumstances , do u think it is the best time to enter the market given the uncertainties seround it?

    ReplyDelete
  9. Alex LuMonday, August 01, 2011 4:32:00 PM

    Hi hng

    I am not familiar with OKA. Chartwise, it is range-bound at RM0.50-0.65. It is trading at a PE of 6.7 times (based on EPS of 9.36 sen for FY2011). Its financial position is healthy. Based P/Book of 0.46 times (based on NTA of RM1.37 as at 31/3/2011) & PE of 6.7 times, OKA could be a good long-term BUY.

    ReplyDelete
  10. Alex LuMonday, August 01, 2011 4:36:00 PM

    Hi MaxWealth88

    You are seasoned investor. You can do fundamental analysis nicely. I will cover only the technical aspect and it is not good. OSK seems to have peaked. It has in fact broken its uptrend line at RM1.55-1.60.

    In Feb 2008, it broke its uptrend line at RM1.40-1.45 and slid all the way to RM0.55-0.60. That of course coincided with the market entering into a bear phase. Are we going there now? Only time will tell...

    ReplyDelete
  11. Alex LuMonday, August 01, 2011 4:50:00 PM

    Hi hng

    AIRB share is backed substantially by cash (about 80 sen per share). The balance of its assets is investment in associated companies, which we need to check out.

    Its EPS is about 21 sen while NTA ia bout RM1.37 as at 31/3/2011. At the current price of RM1.62, it is trading at a PE of 7.7 times or P/Book of 1.2 times. Its dividend yield is fantastic at 15-17% (based on FY2010 & 2009 results).

    Chartwise, the stock looks set to move sideway betweem RM1.60-1.75.

    ReplyDelete
  12. Alex LuMonday, August 01, 2011 4:57:00 PM

    Hi Florence

    I shouldn't argue with JPMorgan when it comes to banking valuation. They know more about finance & banking than I do. However, I must point out that CIMB looks toppish based on the chart. CIMB could have chalked up a double top at RM9.00. If CIMB breaks below RM8.00 this round, it could take a big fall. Why? It could be the forced selling of its stake in Bank Niaga by Bank Indonesia in compliance with its new foreign shareholding rules.

    ReplyDelete
  13. Alex LuMonday, August 01, 2011 5:03:00 PM

    Hi tan

    I am not familiar with Scable. It could be rising due to the hectic development in the power generation & transmission sector in Sarawak. So you have to play it by the ear or using the chart. The stock is in all-time high territory. So, anything is possible. A word of caution: Risk always equal to reward. A stock that has gone up a lot, in a short time frame can also drop a lot, in a short time frame.

    Good luck!

    ReplyDelete
  14. Alex LuMonday, August 01, 2011 5:07:00 PM

    Hi Chun Mun

    I am not familiar with either AMEDIA nor CATCHA. On the later, all I can say is that it is very new and technical analysis is very tricky for anything less than one year old.

    On Amedia, I remember reading a glowing report on that stock. Since the price has gone up, I can only assume that all the good stuff has been priced in. So, you may use the chart for guide you on its price direction. Sadly, it is not exciting as Amedia has just broken its uptrend line at RM0.28-0.29 in late July. Amedia is likely to move sidewa with support at RM0.265-0.27.

    ReplyDelete
  15. Alex LuMonday, August 01, 2011 5:13:00 PM

    Hi Buyer

    I don't have a step-by-step on how I did my technical analysis. I run thru hundred of charts every week. Mostly, I look at daily, weekly & monthly charts all at once. Something jump up & I'll make a note of the trigger for breakout or strong support (for entry). When that price level is reached, I call a BUY. I wish I have a more systemic way of doing it. I probably will one day.

    ReplyDelete
  16. Alex LuMonday, August 01, 2011 5:18:00 PM

    Hi leslieroycarter

    If I am like you (the investors), I would probably have very little in the market now. Unfortunately, I am also a remisier whose clients would call any moment to ask: What's good? The trading never stops. I wear many hats. One moment, I might call a SELL and the next minute, I might call a BUY. I might be negative on overall market, I would still call a BUY. I do not have the luxury of saying: That's it, no more buying.

    ReplyDelete
  17. BuyerWednesday, August 03, 2011 12:19:00 AM

    Hi Alex,

    Thanks for your comment.

    That's the reason for being confused as TA to me sometime is an art! Especially for the beginner like me.

    Regards,
    Buyer

    ReplyDelete