Thursday, April 10, 2014

Carlsbg: Leading the Way?

The market has been focusing on O&G stocks for quite a while and lately the focus is shifting to water-related stocks. At the same time, we have seen many smallcap stocks outperforming bigcap stocks. In such a market, the darlings of yesterday have become the rejects of today.

When you look at Carlsbg, GAB and Orient, you will see that they have retraced 50% of their gain in the past 2-5 years. In addition, they are trading near strong horizontal support. In the case of Carlsbg, it rebounded from the horizontal line at RM11.50. GAB and Orient are also trading near strong horizontal support. If these support levels hold, these stocks will form a base and they may recover after a period of consolidation.

Investors, who are wary of the fast action among the smallcap stocks, may consider buying these beaten down bigcap stocks. Don't be discouraged if your friends tell you that investing in bigcap stocks is so passe! You know better: Making reasonable return by taking calculated risk will never go out fashion!

Chart 1: Carlsbg's weekly chart as at Apr 9, 2014 (Source: Tradesignum)

Chart 2: GAB's weekly chart as at Apr 9, 2014 (Source: Tradesignum)

Chart 3: Orient's weekly chart as at Apr 9, 2014 (Source: Tradesignum)

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, Hibiscus.


Big Sea said...

Both GAB and Carlsberg are still having PE of around 20. They are not cheap.

BAT is providing similar range of DIVIDEN (5%) with a similar PE. Malaysia custom is now looking at enforcement against smuggled cigarettes. You can see posters around coffee shop. That bodes well for both BAT and JTINTER. In Singapore, every single cigarette have labels " SDPC ". Action can be taken against owner of cigarettes without the label. That makes the enforcement a real ease.

I would prefer BAT to beers at current valuation.

lima said...

Hi Alex, your previousl article on Salcon, do you think its uptrend still in tact after the recent rise and huge volume? thx....

lai said...

Hi Alex,

The rise in Pmetal and not LB aluminium baffles me. Times like this should i listen to Livermore or succumbs to natural human biases?


luckystock2 said...

Hi Alex,
Can you comment on Pantech's technical outlook ?

Alex Lu said...

Hi Big Sea

You have a point as far as GAB and Carlsberg are concerned. Still they have dropped a lot and the demand for their products are still there. The profits would roll back and the funds would buy again.

Alex Lu said...

hi lima

Salcon will come under some profit-taking at RM0.80. If it can charge thru that level, we can see RM0.90 for this stock.

I feel that it can go higher for the reason that I stated in my post. The other reason is that water stocks are coming under the radar and there is a scarcity of decent water stocks at low prices. Salcon will stick out like a sore thumb.

Alex Lu said...

Hi lai

I don't know about LBAlum but Pmetal broke above its symmetrical triangle at RM2.60. It could go to RM3.50-3.60.

Oh, I like your English...

Alex Lu said...

Hi luckystock2

Pantech tested its intermediate uptrend line at RM0.88-0.90 and rebounded. Now it has broken above the descending triangle at RM0.97.

It may continue with its prior uptrend.