Tuesday, June 26, 2007

STI below ema20 days; next stop 3490

STI dropped below ema20 days, bad news...but more of that later.

Swiber made an announcement today that they are conducting private shares placement exercise to raise a total of S120.4 million, with CIMB-GK as the placement agent, at a price of $2.1748 (representing a discount of 7% to today's close of 2.3385). They wanted to raise the money mainly to expand its fleet of vessels for its offshore marine support services and EPCIC projects, the rest of general working capital purposes.

Short term this is bad, because it will dilute the value of each share and the price should drop around the placement price of $2.17. Not fair right, big institutional buyers can have 7% discount to buy swiber, while retailers like me have the scraps. Long term, it should be good because Swiber is using it to expand its fleet (so as to get more business) and to improve its cash flow (which deteriorate based on last quarter report).

More info can be found here.

I'll wait for musicwhiz to digest this. It's so heavy for me, don't even know what to focus on to read. (so ashamed...want to find out more about FA, up to now still don't know how to do independent research)

All indicators and charts show swiber is topping, so might really drop near to placement price before it can go up. I'll ride the wave, perhaps adding more when it dropped enough.

Straits asia really dropped near my support level of 1.48, closing at 1.49 today. For a brief moment, it even went below my support level (intraday low of 1.43). Sitting on trendline now, with indicators suggesting more downside. Ride it out or protect profit? I still haven't decide yet...oh no. I'll probably do nothing as of now, see if 1.41 can support this. If it really nears 1.41, might really have to protect profit and run first.

Pac andes dropped a lot today and really reached 0.915/0.920, but I didn't enter. I was really not confident of Dow this week (more on that later). I'm also quite fully vested in stocks, so thought that unless I sell of some of my holdings, I'll not put in more. Must be disciplined. Might drop lower to test ema50 days at 0.89. If that really happens, it's a MUST buy already. Margin of safety...margin of safety...

Yongnam is steady today. One of the few green counter in SGX today. In the morning went up to a high of 0.450 before closing +0.010 at 0.440. Not too bad, with high volume too on a downday like today. I think when market sentiment is better, should see it cheong more. I queued to buy 5 lots at 0.435 when the price was around 0.440/0.445 in the morning. Thought of trying my luck only, but when the downturn came, I got the 5 lots. Well, I'll gladly take it. Total of 10 lots of yongnam with average buy price of 0.390.

All construction counters holding well (worst is perhaps koh brothers but it ran up a lot, so maybe that's why).

STI dropped a lot today. Down 55 points (1.54%) and is now below ema20 days at 3525. Might see it drop to 3490 before we can find relief, pending on Dow. But Dow itself isn't that fantastic either. I'll do a brief chart on that later.

Good thing is that the volume today is 3.8 billion (compared to 4.8 billion yesterday), so at least the volume isn't huge. Huge selldown on property and bank stocks. I think this correction is good because it paves the way for the next earnings seasons bull run coming up in a month's time. STI reaching too high, need to come down before going up further.

Dow daily shows the making of a double top reversal. If tonight it dropped below the neckline (13,370), then went up to test that resistance but fails, Dow might really drop below ema50 days, possibly seeing relief at 13,040 or lower (according to Joshing from CNA forum).

FED meeting this week...so rate hike is the theme over at US side. Let's see how Ben talks, he might save the day or doom us all. Presently Dow is +43 now, Europe a sea of red. Enough for now, tmr let's see who wins...bear or bull :)