PEC

PEC after spiked from Ipo at 40 cents and hit historical high of 0.95 on 2009 Sep 01 and hit low at 0.595 on 5 Nov 2009 since then PEC had been trading within the symetical triangle pattern for >75% triangle filled.. Now chart reading is poiting a break out at 0.79 with price measurement of 1.05!!! Hold tight !!!

Which Is Better, Trading Or Investing?

Are there are any stocks to speculate with a 1 – 3 months horizon? How about stocks to buy and hold for up to 2 years? Any recommendations? These are some of the queries, which are posed by readers and friends.

It is noteworthy that the above questions represent two different approaches and views on the stock market. Before I point out some “tips” for the two approaches, I would like to draw readers’ attention to their differences, which are tabulated below.

Having appreciated the differences, I will now elaborate on the criteria to pick stocks for trading, as well as, buy and hold approaches.

Criteria to pick stocks for trading purposes

Presence of near term re-rating catalysts
There should be presence of re-rating catalysts in the near term. An excellent example would be dual listing. Typically, this should provide at least a short term boost to share prices, especially if companies are sound and are trading at price to earnings ratio lower than their counterparts in the stock exchange which they are going to list. Z-Obee is a case in point where its share price more than tripled since its announcement on dual listing.

Secondly, the industry in which the companies are operating in should be growing at phenomenal rates. It would be better if the companies’ peers are reporting better than expected results. This would increase the possibility of earnings surprise for the companies for this quarter and upside guidance for the coming quarter from the companies, spurring a re-rating of share prices. To be clear, the industry should be growing at phenomenal rates and not sustainable rates. Thus, it is not required to find companies which are growing steadily at 10% a year, but is required to find companies which are growing at least 30% y-o-y for the current quarter and next quarter.

Thirdly, if one is aware of the contracts bidding from the companies, one should be able to estimate when the contract wins would be announced. If I take Swiber as an example, an investor who is familiar with it should know that Swiber’s contract awarding period in South Asia and Southeast Asia is usually around Dec to Mar. Couple this with the improvements in the oil and gas industry, one should not be too surprised that Swiber announced a string of contracts during that period. Nevertheless, there is a fair level of risk in this prediction.

Fourthly, for companies with blockbuster products which are expected to have significant contribution in the near term may also be considered as stocks for trading purposes. These companies have the potential to enjoy a significant boost to earnings which may result in an upwards re-rating of shares.

Propaganda on the stocks
If readers want to trade, then a prerequisite would be to choose stocks which have propaganda. Examples of such would be plant visits and road shows where fund managers and analysts can get to know the company and company management better. Analysts typically will write analyst reports or some internal notes after such visits. Stocks which are good to trade should also have some “stories or some attention catching ideas” to excite the investment community. An example of such stock is KS Energy where it soared multiple folds when it announced that it would modify its business model from being solely a distributor of consumable oil parts to a rig refurbisher in 2005.

Technicals
This is a colossal topic to discuss here. Suffice it to say that the charts should look strong, indicators well placed, and price movement confirmed with volume and price action. As a result, traders may buy the stock at a relatively high price (as measured by valuation metrics such as high PE ratio against the peers) and sell it higher.

Criteria to pick stocks for investing purposes

For investors who are looking to buy and hold with a horizon of up to 2 years, it would be good to consider the following points:

Competent management – necessity for buy and hold

Management should be competent so as to manage the company well over the medium to long term. Over the short term, management competency can be masked by non recurring items such as executing seemingly earnings accretive acquisitions which boost the company’s results in the short term, or create propaganda so as to create interest in the stock. However, only time will tell whether these actions create shareholder value. Thus, if readers want to buy and hold over a longer period of time, it is pertinent to find a company managed by competent management.

Sustainable earnings and outlook

For this strategy, it is a prerequisite to find companies with predictable financial performance. To have predictable performance, the companies should have the following characteristics.

Firstly, the companies should operate in industries which are growing steadily. They should not be in industries with limited visibility or in cyclical industries. For example, the foundry companies typically have limited visibility and it would be wise to avoid them with a buy and hold strategy. In 2007, the automotive companies’ shares soared at the top of the industry cycle but subsequently fell due to over supply of wheels and lack of demand. Therefore, it is best to avoid industries with limited visibility or in cyclical industries.

Secondly, besides having a stable growing industry, it is important to buy companies whose earnings are predictable due to their business model. Companies whose earnings gyrate widely due to changes in demand should be avoided as these companies involve more monitoring and attention to hold this kind of shares. Nonetheless, if readers can determine that the companies’ lackluster results are once off and they are likely to post better results for the next few quarters, readers can still consider to invest in these companies.

Margin of safety
Buy and hold is typically a more conservative strategy than trading. Thus, it is important to reduce risk by having a good entry price, so as to have a good margin of safety. This is one of the tenets which Benjamin Grahman advocates.

Dividend yield
This is a good criterion to have as it generates income while holding your stocks till they reach your target price. In addition, it creates at least some incentive to continue holding while some of your friends may have obtained quick gains (as well as losses) in the market.

Conclusion – which approach is better?
To decide which approach is better, it depends on the horizon that one has. Different strokes for different folks so which approach suit you? It’s up to the individual reader to decide.

1 For the purpose of this article, buy and hold is synonymous with investing and entails a horizon of 4 months to 2 years. 2 years were chosen as there is considerable difficulty to predict beyond 2 years for the average retail investors


Ernest Lim currently works as an assistant treasury and investment manager. Prior to this role, he was with Legacy Capital Group Pte Ltd, a boutique asset management and private equity firm, as an investment manager since 2006. He received a Bachelor of Accountancy (Honours) from Nanyang Technological University in 2005. He is a Chartered Financial Analyst, as well as, a Certified Public Accountant Singapore

PEC

PEC after recently price surged to high of 0.81. now price is range trade within 0.81 to 0.775... The vol is also declining during the price consodilation phase and we view this is as a positive sign. As long as the price can stay above the 0.77. PEC will have a high chance to break the 0.81 and heading to next target 0.84...however we need to monitor closely for the T+5 deu. especially after Friday the T+5 due date we shall able to see the final move of PEC. personnally I fell is safe to collect at pullback level. ideally is around 0.775 to 0.785 level and SL can set at 0.77... vested interest.

Longcheer

Keyimprovements delivered during the year 2009 result included:
• A 467% increase in cash generated from operations from
RMB 30.5 million in FY2008 to RMB 172.9 million in FY2009
• A 53% decrease in inventory levels
• A 19% increase in net asset value (“NAV”) per share to RMB
1.84 per share

Chart wise, the price has finally penerate the traingle squeezee and with immedaite price target of 0.64 and 0.775 respectively.

Stop loss o.57

CPO

Shares of Asia’s palm plantation companies have rallied over the last one year, riding a rebound in the prices of crude palm oil (CPO) due to lower seasonal production and dry weather conditions.

However, growth of at least 50% in the plantations index has lagged a rise of 55% in Malaysia’s benchmark index fuelled by bank stocks after the central bank raised interest rates last week.

And CPO prices may not stay high much longer because temperatures are set to cool and soybean oil, a rival vegetable oil, is expected to flood the market in the second quarter from a bumper harvest in South America.

Benchmark CPO futures on the Malaysian derivatives exchange are now trading at around 2,680 ringgit ($1,124) a tonne, or about 40% off a March 2008 record of 4,486 ringgit.

A January Reuters poll showed that average palm oil prices in Asia were set to rise more slowly this year and the next as gains from strong global demand are curbed by record vegetable oil output.

SOYOIL, WEATHER
CPO prices are expected to face significant downward pressure in April when a bumper crop of South American soybean is harvested, analysts said.

Palm oil, a cheaper substitute, is now trading at a 5% discount to soybean oil and if that gap narrows, analysts expect consumers to switch from CPO to soy oil, a healthier option.

Macquarie Research said the rebound in plantation stocks gave investors a good opportunity to reduce their exposure.

It rated IOI and Sime Darby as underperformers because both trade at 18 times 2010 earnings in a sector that trades at an average multiple of 17, and have the lowest production growth over the next three years.

“We believe the recent strength in CPO prices is largely seasonal, with the trend likely to reverse from the second quarter onwards,” it said in a note last week.

Concerns that recent dry weather will limit CPO production and keep prices high may be misplaced as plantation owners have not reported any abnormal impact from the lack of rainfall, said analysts.

The Malaysian Meteorological Department reported lower-than-usual rainfall in February, but it is predicting average to above average rainfall from April.

Drier-than-normal weather worsens biological tree stress and reduces the amount of fruit produced by a tree to make palm oil.

Malaysia, Indonesia and Singapore are the only markets in the world where stocks of palm plantation companies are traded. Shares of Indonesia’s Indofood Agri jumped the most, up 310% from a year ago, followed by London Sumatra, up 183%. Singapore’s Wilmar, the world’s largest palm oil producer, rose 126% and Sime gained 57%

“The weather is one factor that cannot be predicted, but our view is that plantation stocks will still do well this year,” said Ang Kok Heng, chief investment officer at Phillip Capital Management.

Strong consumption growth in China and India, the world’s top two importers of palm oil, will hold up demand for the vegetable oil this year, he said.

Global demand for CPO in January jumped 19.4% to 1.46 million tonnes, driven mostly by China’s stocking for the Lunar New Year.

Investors looking for long-term exposure to the sector should consider mid-cap Malaysian planters, such as IJM Plantations and Kulim, said Ang.

“There are opportunities to add (buy),” he said.

Standard Chartered Research, which recently initiated coverage of the plantation sector, is recommending a “buy” on the purer plantation companies.

“With their higher relative plantation exposure, lower valuations and higher betas, our preference is for Indonesian planters,” analyst Adrian Foulger said in a note, naming London Sumatra, Indofood Agri and Golden Agri.

HwangDBS prefers plantation stocks listed in Singapore or Indonesia over their fully-valued Malaysian peers, said David Ng, its chief investment officer.

“We are looking at non-Malaysian planters and would buy on weakness,” he said

STI chart reading

Finally the STI next direction is going to reveal soon. Last week analysis mentioned that if STI when crossover 2797 will ragain the upward momentun. 2808 and 2840 the Fibo 50% and 38.2% retracement. However if STI aboe to corss over 2888 or the 23.6% retracement will signify the potential for STI to break the new high recorded last year. at 2947....

The Singapore stock market has finished higher now in two of four trading days since the end of the modest two-day winning streak in which it had gathered nearly 25 points or 0.9 percent in the process. The Straits Times Index moved above the 2,790-point plateau, and now analysts are expecting more upside at the opening of trade on Monday.

The global forecast for the Asian markets is broadly positive, thanks particularly to better than expected data from the United States. A surge in commodity prices also is expected to provide support, along with steel, financial, technology and property stocks. The European and U.S. markets ended solidly higher on Friday, and now the Asian bourses are expected to follow suit.

The STI finished sharply higher on Friday, thanks to gains among the gaming stocks and financial shares.

For the day, the index collected 21.59 points or 1.3 percent to finish at 2,790.26. Genting Singapore surged 7.1 percent to lead the gainers.

The lead from Wall Street is sharply higher as stocks rose by substantial margins on Friday, thanks to news that the U.S. economy shed fewer jobs than expected in February. The major averages showed notable upward moves on the day, with the NASDAQ reaching its best closing level in well over a year.

The markets keyed in on a report from the Labor Department showing that the economy lost 36,000 jobs in February following a revised decrease of 26,000 jobs in January. The relatively modest decline surprised economists, who had expected a more substantial loss of about 68,000 jobs amid the impact of severe winter weather in parts of the country.

The report also revealed that the unemployment rate in February remained unchanged from the previous month at 9.7 percent. The unemployment rate had been expected to tick up to 9.8 percent.

The markets were able to build on their already strong gains after the Federal Reserve reported that consumer credit unexpectedly showed a modest increase in the month of January. Consumer credit increased by about $5.0 billion in January following a revised decrease of about $4.6 billion in December. The increase came as a surprise to economists, who had expected credit to decrease by about $4.5 billion.

With the unexpected increase, consumer credit rose for the first time since January 2009, marking the biggest increase since July of 2008.

Dow Jones

Down Jones very nice on the up trend channel.. once break the 10470 with mark the new up trend...

Biosensors

Biosensors, price is range trade from the Ceiling and Floor.
C= 0.89 & C= 0.81... during the price consodilation process it was clearly observed that the volume is declining too.. this is an healthy correction.

Trading Strategy
Buy long at 0.82 to 0.835 level... and SL is 0.81 or below..

Straistasia - Breaking Rising Wedge soon!

StraistAsia--- Chart formation is near breakdown of Rising Wedge!!!!
-di is negatively placed and ADX is poiting upward and increasing strength. avoid catching the falling knife unless you want to shortsell that will be fine.
SL =2.06 or today bar high.
Target = 1.93, 1.86 and 1.81 respectively. ultimate goal 1.63

just for case study, not an inducement to trade