THIS STOCK RALLIED STRONGLY RECENTLY !!! SEEMS THE LATEST CORRECTION WAS OVERDONE !!!
Hello
to all readers out there. Recently, a lot of oil & gas counters
have pulled back as the crude oil price made slight retreat. However,
recently, BRENT OIL has climed back above USD 40 and o&g counters
have kick-started momentum for another rally.
Having said the above, the stock which I'd like to talk about today is SEALINK INTERNATIONAL BERHAD (SEALINK - Stock Code 5145, Main Market, Transportation & Logistics)
BASIC INFORMATION ABOUT SEALINK
SEALINK core business:
i) Ship Chartering
ii) Ship Building
iii) Ship Repair
Both the above services are catering mainly to oil & gas sector.
Market Capitalization : RM 127.5 million
Shares Float : 500 million
Website : http://www.asiasealink.com/
I had recently written about SEALINK on 9th June 2020, please refer the article below:
1. AN UPDATE ON CRUDE OIL - MADE A DOUBLE BOTTOM W SHAPE BREAKOUT - BULLISH AHEAD FOR O&G SECTOR
Let's see the daily
chart of BRENT CRUDE OIL below. If we look at Circle 1, we see that it
had made a W shape pattern and tested the support price 2 times.
Recently, the price
had broken out above resistance line to confirm a W shaped breakout and
now is trending upwards to close the gap towards USD 45 as many of the
world economies are reopening after facing COVID10 pandemic. Today we
saw that o&g counters started to rally from their recent pullback
prices, like HIBISCUS, DAYANG and many more. Hence I see that SEALINK as
an o&g service provider should be riding this rally as well.
2.
COUNTERS RELATED TO SEALINK MAJOR SHAREHOLDER (DATO AWANG DAUD AWANG
PUTRA) ARE ALSO STABILIZING AND MAKING A V-SHAPE RECOVERY
Refer to below counters related to SEALINK as they all have a common major shareholder DATO AWANG DAUD AWANG PUTRA.
Most of them have made a strong V-shape recovery since the March 2020 lows:
i. SERBADK - low of RM 1.02 in March 2020, latest closing RM 1.65 (62% gain)
ii. KPOWER - low of 85c in March 2020, latest closing of RM 2.18 (156% gain)
iii. SCIB - low of 90c in March 2020, latest closing of RM 2.02 (124% gain)
iv. MINETEC - low of 6.5c in March 2020, latest closing of 30.5c (369% gain)
Looking at the
gains in all the above related counters, SEALINK should be able to also
generate momentum on the way to its recent high of 70c in FEB 2020.
3. TRADING WELL BELOW ITS NTA OF 66 CENTS
Refer
to latest report of Assets VS Liabilities, we can see that total Assets
RM 507 mil (66c) versus low liability of RM 177 mil.
The latest closing
price of 28.5c, indicates a whopping discount of 37.5c from its NTA
value of 66c which is about 52.5% discount. Investors getting a bargain
on buying this counter as such level.
4. TECHNICAL ANALYSIS - TOO OVERSOLD BELOW 0.27 FIBO - REBOUND IS IMMINENT
Refer below the basic price and volume chart with key EMAs for SEALINK daily chart :
A few observations on the daily chart chart:
i. Recently, the price had rallied from 24c to a peak of 40.5c, showing about 75% returns during the period
ii. There was some heavy profit taking and price had retraced downwards
iii. We see that the price had RETREATED TOO MUCH and way below the normal 38.2 FIBO level
iv.
Price retracement below the 0.27 FIBO level, had been meet with STRONG
BUYERS who are buying this stock as a sign of TOO OVERSOLD in current
market
v.
On 16th and 17th June 2020, big volume of buying entered the stock,
rejecting the fall in priced, forming a hammer on 17th June 2020,
signalling that a reversal trend upwards is highly possible from
tomorrow
CONCLUSION
Considering all the above, I opine that current price for SEALINK is attractive due to below:
i) Oil price made a W shape double bottom breakout and o&g stocks are picking up momentum
ii) Trading well below its NTA of 66c
iii)
Related companies with similar major shareholder to SEALINK e.g.
SERBADK, KPOWER, SCIB & MINETEC are making strong V shape recoveries
v) Buyers rejecting prices below FIBO 0.27, and hammer pattern formed on 17th June 2020 indicating possible reversal upwards
LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.
Disclaimer
: The above opinion is never intended to be a BUY CALL whatsoever. I am
sharing my observations ONLY based on fundamental; past history;
current trading pattern; charts etc. Please make your own informed
decision before buying this share or whatever share for that matter.
BURSAMASTER
https://klse.i3investor.com/blogs/Bursa_Master/2020-06-17-story-h1508844666-THIS_STOCK_RALLIED_STRONGLY_RECENTLY_SEEMS_THE_LATEST_CORRECTION_WAS_OV.jsp
https://klse.i3investor.com/blogs/Bursa_Master/2020-06-17-story-h1508844666-THIS_STOCK_RALLIED_STRONGLY_RECENTLY_SEEMS_THE_LATEST_CORRECTION_WAS_OV.jsp
