Trading: Microlink

I have been getting a lot questions about the boom in tech stock prices in the US. But if you are looking for something similar in the Malaysian tech sector you’d be looking in the wrong pace. The Malaysia IT sector is not really an IT sector in that there are no Adobes, or Intels or Suns which develop and sell IT products. Instead we have companies like GHLSYS or Microlink which provide IT services. IT services do not track internet or semiconductor stocks but are more closely related to the services, since their cashflow is dependent on being given contracts and charging maintenance fees.

Here is some pretty good coverage on Microlink, a  stock that I like which has been experiencing strong growth and set to ride the wave on the consolidation of the finance industry (something which most commentators have missed with all this fixation on plantations).

Trading: Oil

In case you were wondering what is going on with our plantation stocks, here’s the reason:

Now I usually don’t post up stuff that’s not related to Malaysian equity but I just wanted you to know what has been distracting me these past few days: A good stock (or commodity in this case) getting whacked. Times like this I’m just like a vulture, circling overhead ready to pounce!

Gratuitous Food Pic

Chicken and Pork Cutlet Hong Kong styleeeee!

Certainly more interesting than the below.

Not a great place to buy or sell.

Trading: Proton

As I get quite a few comments on what I think of this or that happening to a particular company, I thought I’d just link to this article analysing this ”deal” between Proton and Peugot. In short, the question you always have to ask yourself whenever you hear anything is whether something will definitely lead to earnings growth. A “maybe” is just not good enough. Us traders have higher standards.

Life: Unquantifiable Value

A few weeks ago I did one of the simplest, most amazing things in my life. I signed up for a skuba session with a Dugong! For those who don’t scuba dive, the dugong is a vegetarian and completely harmless sea mammal which got its name from the Malay word duyung meaning mermaid or “lady of the sea”. Whilst not quite endangered, it is extremely rare and hard to come by in the open seas. But, for under S$200, I got to feed and play with a tame one for 15 minutes. Now that’s ROE!!

dirty dog meets the sea cow!

Trading: Asiatic + Bkawan + Plantations in general

It has been a while since I have identified any stocks worth buying as I am bearish the market and did not participate in the last runup since July (except to sell my shares). However, due to the recent weakness in commodities and oil, some of the plantation stocks have been retracing. When retracement reaches my accumulation zone for some of these stocks, I will be ready to pounce. But not yet, because the charts for oil are not still looking good. If the bullishness in the US markets continue into next week, it might get whacked some more and cause plantations to weaken further. Historically, some of the plantation counters I have been looking at tend to have down or sideways movement lasting 6 – 8 weeks, and we are in week 2-3 at the moment. So I’d like to look for some more weakness as they work of their overbought conditions and start buying perhaps closer to the next earnings season.

Here’s a graph showing you what I mean:

I would love to buy this baby in the 3.0 – 3.2 range even though it is showing plenty of support at the moment.

Here’s another one:

8.0 is my ideal buy point.

Happy Trading!

Trading: Maybank and Bumiputra-Commerce

Since we’re all waiting to see whether the finance sector are going to lead the next wave up, here are some reports. Looks like our brokers are doing their bit to make this come true.

Maybank and Bumiputra-Commerce.

Trading: Spring it on…

In the past 2 days the tell-tale volume (something I was watching out for) spiked on the KLCI. Since it was not accompanied by a spurt up or down, it looks like we have heavy disribution this week. Whether this leads to a move up or down is anybody’s guess. In the 3 times this has happened this year we have had 2 reversals and 1 consolidation. Not a good sign in my books.

It’s interesting to note that plantations fell off a cliff today, following oil. So even though palm oil is supposed to be a substitue fuel, it has reacted negatively to the price of falling oil. So in the short run, it is actually correlated to it. This is because palm oil prices have risen on crude oil fears and now that those fears are receding, palm oil prices have dropped as well. However, Industrials are up, offsetting plantations and holding the KLCI largely where it is. So the big question is, now that the energy story is over, whether we think that Industrials will keep on going, or whether some other sector like finance or construction will take over, and if so, which… I’ll be back as soon as I have figured that out!

Trading: Astro and Genting

I’ve posted up research notes for Astro and Genting.

Genting’s entry into Europe is a good thing, and traditional casino operators may get a temporary boost especially with the recent crackdown on internet sites.

Astro is also growing its earnings and sales nicely. That one will be put on my watchlist soon.

Happy trading!

Trading: Volumes + Channel

I’m watching with interest to see whether the index is still in Bull territory but consolidating, or it has formed a top. Since volumes are still extremely light, it’s anybody’s guess what next week will bring. One the one hand, the bulls are of the view that when traders come back from their vacations this month, they will attempt to push the market up one more leg, but the bears are of the view that the majority are just waiting for the right time to unload. Either way, volumes are the key so I am going to wait for them to rise before I take my signal.

I have also drawn a channel which represents the bullish view. Until that gets violated, they have every right to keep saying that this is a bull market. Will the index follow it up to its expectation levels? Your guess is as good as mine.

Happy Trading