Keck Seng - In Strong Cash Flow & Financial Position, Slow & Steady Uptrend

Chart: KSeng daily chart (Source: tradeSignum)

Fundamental Review & Outlook

Keck Seng is involved in the cultivation of oil palm, Cocoa, processing and marketing of refined palm oil products, housing development, property investment and investment holding. The main factor for the recent huge income growth was due to the share disposal of its entire shareholdings of 35.58m shares in Parkway Holdings Ltd with a gain of RM260.14m. KSeng has became one of the Cash Rich company with the one-time gain income. KSeng is maintaining a slow but steady growth in the last few quarters. The company's 1-for-2 bonus issue plan is anticipated to be completed in the 1st quarter 2011.

Technical Review & Outlook

KSeng is in a steady uptrend with the supports of bullish technical data. The stock hit the record high last week with low volume transacted. It looks a bit tired and needs more convincing news to push the price higher. Otherwise, it may fall into consolidation mode and may have a pause in the bull run. The current bullish news are high CPO price, bonus issue plan, and healthy financial position.

Technical Indicators

Volume: Stock price needs further buying support to breakthough RM6.80 main resistance.
MACD: Bullish, after golden cross being constructed in early Dec 2010.

RSI: Bullish, hovering at 70 level.

EMA50, 100, 200: Bullish, as long as it stays above all these lines.

Bollinger Bands: Bullish, above mid-line.

Support level

RM6.50, RM6.25.

Resistance level

RM6.80

Risk

1. Slow down in revenue and profit due to the disposal of healthcare business.

2. Commodities prices like CPO retreated with global demand reduce and higher productivity in 2H 2011.

Near-term outlook (30-90days)

Consolidation mode after sharp gain last week.

Long-term outlook (6-12months)

Bullish, in long term uptrend, buy on weakness

Trading opportunity

Due to strong gain during the last few trading sessions, stock may falls into consolidation mode, buy on support levels.

Guan Chong - Huge Growth Potential with Production Capacity Expansion Plan in Place for the Next 3 years

Chart: Guanchg daily chart (Source: tradeSignum)

Fundamental Outlook
Guan Chong is currently one of the top 10 Cocoa-derived food ingredient maker in the world. The production plant in Johor has reached the maximum production capacity 80,000 tonnes yearly. It is investing RM80mil to setup a plant in Indonesia with a starting production at around 60,000 tonnes yearly in the 1st quarter 2011, with the potential annual capacity to reach 180,000 tonnes within the next 2 years. For the 9 months ended Sept 2010, the company revenue soared to RM836mil from RM425mil in the same period earlier while net profit jumped 6-fold to RM57mil against RM8mil previously. The company's 1-for-3 bonus issue and 5-year warrants 1-for-4 proposal has been approved during the EGM last week. The bonus issue plan is anticipated to be completed in the 1st quarter 2011.

Technical Outlook
After 2 months consolidation, GuanChg tried to test the previous high RM2.00 last week accompanied by huge volume transacted. However, stock price retreated as volume decreasing with less buying activity support. Price will only able to move up and break the main resistance RM2.00 with more volume support, otherwise it may stay in consolidation mode longer.

Technical Indicators
Volume: stock price needs further buying support to breakthough RM2.00 main resistance.
MACD: Bullish signal after golden cross being constructed last week.
RSI: Bullish signal.

Support level
RM1.80.

Resistance level
RM2.00

Risk
1. High-debt position after aggressive business acquisition and expansion plan implemented. However, it is informed that it is still under managable level as still level of debt ratio is normal in the industry.
2. Global consumer spending uncertainty.
3. Commodities prices like Cocoa increase may dilute profit margin.

Near term outlook
Consolidation mode

Long term outlook Bullish
Long term uptrend, buy on weakness

Trading opportunity
Due to strong gain during the last few trading sessions, stock falls into consolidation mode, it is good bargain hunting opportunity during profit taking.

KLCI Market Review and Outlook Commentary - 19122010

KLCI Daily Chart (Source: TradeSignum)

Fundamental outlook

Refer to KLCI Daily Chart shown above, the KLCI index was moving in a tight range and profit taking activity kicked in as anticipated. The market movement was accompanied with low volume transacted due to the year end holiday mood and most of the fund managers had closed the books to log in the huge profit gained in year 2010. The KLCI has broken the 1st support level 1500 and closed at 1499 level on 17th Dec 2010, while the market volume was hovering between 1.0bil level with less excitement anticipated. The market outlook for the coming weeks will be about the same and should maintain until the last trading day on 31st Dec 2010.

Technical Outlook
As long as the KLCI stays above the long term bullish support line, the uptrend is still intact and the super bull run in year 2011 is highly anticipated.

Technical Indicators
KLCI broke 50MA: Bearish.

KLCI above 100MA & 200MA level: Bullish.
MACD (12,26) dead-cross: Bearish.

RSI stays at 50 level: Neutral.

Support level

1,480, 1460, 1440.

Resistance level

1,500, 1524, 1531.

Near Term Outlook (30-days)
KLCI less excitement with less activity happening due to the holiday season in Dec 2010, most of the fund managers may already closing the account books earlier thanks to the huge capital gain in year 2010 bull run. Bluechips may not fluctuate much from current level, but undervalue mid-cap to small-cap may outperform the index link counters in near term.

Long Term Outlook (6-months)
With the improvement of global economy sentiment especially in US USD858bil tax rebate 2-years extention, Increase of Germany consumer confidence, delay of interest rate increase in China, as well as higher potential growth in emerging markets especially in Asian region. Thus, the equity and commodities markets are anticipated to be outperform the other investment like bond market.

Trading opportunity

Bargain hunting on good fundamental stocks on weakness.

Favourite stocks recommendations

Finance - Maybank, CIMB, RHBCAP, PBB.

Consumer - Asia File, CI Holdings, GuanChg, TWS.

Construction - Kimlun, Sunway, Gamuda, Wct.

Healthcare - KPJ, Faber.

Plantation - BStead, TDM, MHC, Cepat.

Trading/services - Kfima.

Gaming - Genting.

Telecommunication: Axiata.
Environmental: Cypark.
Oil & Gas: Kencana, Pchem.
Industrial: DRBhicom, Daibochi, Scientx.

TWS in Super Bull Run!

TWS Daily Chart (Source: TradeSignum)

TWS Daily movement analysis

As discussed earlier, TWS has broken the main resistance and entered into Super Bull Run! The breakout was mainly due to the strong quarterly result announcement, subsequently entered into strong uptrend with the support of buying interest created among investors. It has increased from RM4.00 to RM6.00 traded as on 17th Dec 2010. With the impressive of 50% gain achieved in 2 weeks time. The question now is does TWS going to hit the ceiling or continue flying sky high? Technically, there are many ways to predict the stock direction ahead. The fairly basic one which I feel is also one of the most effective tool is by using the "Daily Trading Volume Analysis" method.

TWS Daily Trading Volume analysis
Refer to TWS Daily Trading Volume table above, noted that eversince the Bull run triggered in early Dec 2010. The trading volume has shotted up from an average daily trading volume of less than 5,000lots to the highest of 34,000lots achieved on 3rd Dec 2010 (Please find details of trading volume on the Website). It followed by a minor and quick profit taking activity which is also called the filtration process to clean up the weaker/less confidence traders, and the process has to be accompanied with a "reducing daily trading volume" - which can only being rectified as "Healthy Filtration Process". The daily trading volume is slowly reducing from the top of 34,000lots to around 15,000lots, and subsequently reducing to around 5,000lots on 16th Dec 2010. Nevertheless, the very positive sign is the stock price is not only able to holding so well but still able to continue moving up with lower volume supported. It means that this stock is sending a very positive signal to the trader showing that it can easily assorb all the selling pressure with little trading volume transacted. So, since the stock is "telling" the trader clearly that it is stronger than everyone's thought, and is ready to continue flying high!

Conclusion

Due to the impressive financial results achieved and attractive valuation, as well as strong technical indicator supported. It is definitely a STRONG BUY CALL!

2010 Year End Window Dressing Kick Off??

KLCI Daily Chart (Source: TradeSignum)

Commentary

Refer to KLCI Daily Chart shown above, it has successfully builded a base at the low of 1474 level during the profit taking acitivity occured 2 weeks ago. It rebounded and moved all the way up to 1521 level last week, follow by another round of profit taking activity which has pulled the KLCI down to 1508 level. The market volume has soften from the peak of 1.5bil to around 1.0bil level with less excitement anticipated due to the year end holiday mood in Dec 2010.

Technical Indicators

1. KLCI stays above 50MA & 200MA level: Bullish.
2. MACD (12,26) golden-cross: Bullish.
3. RSI stays at 50 level: Neutral.

Support level
1,500.

Resistance level
1,530.

Near Term Outlook (30-days)

KLCI less excited with less activity happening due to the holiday season in Dec 2010, most of the fund managers may decide to close the account book earlier thanks to the huge capital gain in year 2010 bull run. Bluechips may not fluctuate much from current level, but undervalue mid-cap to small-cap may outperform the index link counters in near term.

Long Term Outlook (6-months)

With the improvement of global economy sentiment especially in US & Europe, and huge potential growth in Asian region especially in emerging markets, overall sounds convincing and it is good opportunity for equity and commodities markets in year 2011 ahead. Technically, as long as the KLCI stays above the long term bullish support line, the uptrend still intact and the super bull run in year 2011 is highly anticipated.

Trading opportunity
Bargain hunting on good fundamental stocks on weakness.

Favourite stocks recommendations
Finance - Maybank, CIMB, RHBCAP, PBB.
Consumer - Asia File, CI Holdings, GuanChg, TWS.
Construction - Kimlun, Sunway, Gamuda, Wct.
Healthcare - KPJ, Faber.
Plantation - BStead, TDM, MHC, Cepat.
Trading/services - Kfima.
Gaming - Genting.
Telecommunication: Axiata.

Environmental: Cypark.

Oil & Gas: Kencana, Pchem.

Industrial: DRBhicom, Daibochi.

Pimco Raises US Growth Forecast After Tax Deal

Published: Friday, 10 Dec 2010 3:13 AM ET

Pacific Investment Management Co, manager of the world's largest bond fund, raised its growth forecast for the U.S. economy to between 3 percent and 3.5 percent for 2011 from its earlier estimate of 2 percent to 2.5 percent, Chief Executive Mohamed El-Erian told CNBC late Thursday.

The more positive outlook was influenced by measures put in place to stimulate the economy such as the compromise to extend Bush-era tax cuts for another two years, but further stimulus measures would be needed to keep the growth going, El-Erian said.

"Maintaining such a growth rate beyond 2011 requires additional measures to enhance competitiveness and achieve medium-term fiscal consolidation," he wrote to CNBC.

Pimco sees the economy growing 3 percent to 3.5 percent in the fourth quarter of 2011 from the same period of this year.

"We revised this week our outlook for U.S. growth in 2011 taking into account Monday's announcement on additional fiscal stimulus measures," El-Erian said in an interview with Reuters.

El-Erian also shares the co-chief investment title with Bill Gross, who runs the $256 billion Pimco Total Return Fund.

"It is far from certain at this point that 2011's higher growth projection will translate into a significant improvement in the growth outlook for the period beyond next year," he added.

Obama on Monday unveiled a compromise deal to extend all Bush-era tax cuts for two years, giving ground to emboldened Republicans who won big in last month's congressional elections.

Many economists also raised their U.S. gross domestic product forecasts after the tax deal struck by Obama, which included a surprise reduction in payroll taxes for 2011.

(Source: CNBC.com)

Tax Compromise is Gift to Markets as Traders Await Santa Rally

Published: Monday, 6 Dec 2010 10:12 PM ET

The proposed extension of Bush era tax cuts is another gift to markets and makes a year-end Santa rally even more likely.

President Obama Monday said he would support a tentative compromise to keep in place all Bush tax cuts for two years, as well as extend unemployment benefits for 13 months. The White House also added a reduction in the Social Security tax for workers to 4.2 percent from 6.2 percent for a one-year period.

Traders and analysts, for weeks, have been predicting an extension of all of the tax cuts, including those that keep capital gains and dividend taxes at a maximum 15 percent.

However, if those tax cuts and taxes for the wealthy were not to be extended, as proposed by some Democrats, traders had expected to see stock market selling. They also had been expecting a relief rally once a deal was announced. The deal still needs approval of Congressional Democrats.

James Paulsen, chief investment strategist at Wells Capital Management, said he thinks any relief rally will be limited. "It's all in the market. It was as expected. Anything less would have been bad."

"I think, more than anything, the certainty and tax predictability will help business job creation and the economy," Paulsen said.

U.S. stock futures turned slightly positive Monday evening, after President Obama announced the tax deal at about 6:30 p.m. New York time. The Dow Monday had ended down 19 at 11,362, and the Nasdaq was up 3 at 2594. The S&P 500 fell 1 to 1223.

(Kindly click on the Title to link to CNBC news for more, Source: CNBC)