Author: Ernest Lim's investing blog

Qualcomm – extremely overbought after a 74% rally within 3 months! (23 Apr 19)

Dear readers, This week, Qualcomm caught my attention as it has appreciated approximately 74% from US$49.10 to trade at US$85.62 in less than 3 months. This is due in part to the favourable announcement that Qualcomm and Apple have reached a multi-year settlement agreement (click HERE for more information)   Why is it interesting? Personally, I think Qualcomm may be a potential short target with a favourable risk to reward proposition with a take profit of a few bids, base mainly on a technical perspective.   Basis to short a) With reference to Chart 1 below, Qualcomm is on...

Read More

Best World – down 47% in 2 months! Buying opportunity or falling knife? (12 Apr 19)

With reference to my 19 Sep 2018 write-up (click HERE), Best World has appreciated approximately 147% from $1.35 on 19 Sep 2018 to touch an intra-day high of $3.33 on 13 Feb 2019. At that time, Best World has dropped out of my watchlist after its incredible rally. However, with its recent 47% tumble from its all-time intra-day high $3.33 on 13 Feb 2019 to trade $1.76 on 12 Apr 2019, it seems interesting again. Is this a buying opportunity or falling knife?   Why is it interesting? a) Valuations are more attractive now Based on Bloomberg (see Table 1), Best...

Read More

Chipotle Mexican Grill reaches all time overbought after an 84% rally in less than 4 months! (1 Apr 19)

Dear readers, This week, Chipotle Mexican Grill (“Chip”) has caught my attention with its blistering 84% surge since 24 Dec 2018 and its US$100 rally in the past 16 trading days.   First, what does Chip do? Based on Chip’s company website (click HERE), it is an American chain of fast casual restaurants and has nearly 2,500 restaurants as of 31 Dec 2018 in the U.S., Canada, France, Germany and UK. It is the only restaurant company of its size that owns and operates all its restaurants. Its market capitalisation amounts to US$19.6b.   Why is it interesting? Personally, I...

Read More

S&P500 logged its largest one day fall since Jan. Buy more, or head to the exit? (27 Mar 2019)

Dear readers, Last Fri, S&P500 logged its largest one day fall since 3 Jan 2019, due in part to the weak European PMI and the yield curve inversion between U.S. 3-month bill and 10-year note yields. At the time of writing this, Dow closed 0.55% higher on Tues as U.S. 10 year bond yields stabilise. Is last Fri’s fall the precursor to something more serious? Or it is a false alarm?   First things first, what are the reasons for the sharp rally since late Dec? S&P500 has rallied approximately 20.1%, or 471 points from the intra-day low of...

Read More

Hong Fok hits 10-year overbought level and up 12 out of 13 trading days! (19 Mar 19)

This week, Hong Fok catches my attention this week because a) It has risen approximately 33% in 12 out of the past 13 trading days from an intraday low of $0.685 on 28 Feb 2019 to close $0.910 today. It is noteworthy the 13th day is at an unchanged level. In other words, Hong Fok has not had a down day since 28 Feb 2019; b) At $0.910, this is near its 25 Oct 2015 high of around $0.91-0.920. The previous high which is higher than $0.920 occurred in Sep 2014. I.e. Hong Fok is trading near a four...

Read More

Kraft’s 33% plunge in 4 days – any trading opportunities? (28 Feb 19)

This week, Kraft (KHC – Nasdaq) has caught my attention. It seems to be a trading play with a favourable risk reward setup based on a technical chart basis (aim is to get a few bids of profit if any). It is down a hefty 33% in four trading days from US$48.18 on 21 Feb 2019 to close US$32.20 on 27 Feb 2019.   Likely reasons for the fall Kraft was hammered by a plethora of bad news. Firstly, it reported 4QFY18 net loss of US$12.6b, due mainly to a US$15.4b writedown on its Kraft and Oscar Mayer brands....

Read More

Hi-P – Chart looks interesting with rising ADX, amid positively placed DI (21 Feb 19)

This week, Hi-P caught my attention due to its chart. It last trades at $0.990. Day range 0.985 – 1.00. Let’s take a look. Basis below 1.Chart looks interesting with rising ADX, amid positively placed DI Hi-P has been trading in a tight range $0.885 – 0.960 since 8 Jan 2019 and broke out with strong volume on 11 Feb 2019. ADX has been rising to trade 31.6 amid positively placed DI, indicative of a trend. RSI last trades 57.9. Today is T+8 of 11 Feb upmove. There has been some price weakness on 15 & 18 Feb as...

Read More

Sing Medical – Chart seems to be strengthening (13 Feb 2019)

This week, Sing Medical’s (“SMG”) caught my attention. At the time of writing this write-up, SMG is trading +0.005 to $0.430. Day range 0.425 – 0.430.   Some interesting observations on SMG a) Chart seems to be strengthening Based on Chart 1 below, SMG seems to have breached the near term downtrend line established since Mar 2018. Today is T+7 of the sharp upmove dated 31 Jan 2019 thus, I guess those contra players (who plan to contra and not hold the stock) have already exited. Indicators such as OBV, RSI and MACD are strengthening. ADX last trades 34.5...

Read More

S&P500 has jumped 10.6% since 26 Dec! Should we chase the rally? (13 Jan 2019)

Dear all Since my write-up on 23 Dec 2018 (see HERE), S&P500 has jumped approximately 7.5% since then. In fact, S&P500, after touching an intraday low of 2,347 on 26 Dec 2018, it has risen 249 points or 10.6% to close 2,596 on 11 Jan 2019. Is this the start of another upcycle in equities? Should we chase the rally? Below are some of the positive and negative points which readers can take into consideration before we can arrive to a well thought out answer. Potential positive points supporting the continuous rally a) Fed may acknowledge rising risks to...

Read More

ISOTeam trades near 4 year low despite record order books and bright outlook (10 Jan 19)

ISOTeam (“ISO”) caught my attention. Despite sitting on a record order book, ISO has tumbled approximately 44% from an intra-day high of $0.385 on 10 Apr 2018 to close near a four year low at around $0.215 on 10 Jan 2019. The share price decline was attributable in part to its 4QFY18 surprise loss announced in Aug 2018 (financial year ends in Jun). Nevertheless, my gut feel is that 4QFY18 should mark the trough in earnings and results should improve on a quarter on quarter basis in the next few quarters. As this company is a potential turnaround play,...

Read More

SIA Engineering trades at 9-year low price and 10-year low valuations (26 Dec 18)

SIA Engineering (“SIE”) catches my attention this week because 1) Share price has fallen to the lows last seen in May 2009 – 9 +year low with negative news, more or less well known. It last trades at $2.20 on 26 Dec 2018. Based on Maybank’s report out this month, SIE management has flagged out challenges in their industry approximately two years ago –> on lower maintenance frequency required by newer aircraft and fleet growth at low cost carriers (“LCC”) requiring SIE to think of new solutions to reduce aircraft downtime at hangars; 2) At $2.20, RSI last trades...

Read More

S&P500 has slumped 13.7% in Dec, largest percentage fall since 1931! Has the bull market ended? (23 Dec 18)

Dear all After hitting an intra-day high of 2,941 on 21 Sep 2018, S&P500 has tumbled 17.9% or 525 points to close 2,416 on 21 Dec 2018. In fact, S&P500 has just logged the worst monthly performance in Dec since 1931! Dow has also fallen 3,535 points from the intraday high of 25,980 on 3 Dec 2018 and 4,507 points from the intraday high of 26,952 on 3 Oct 2018. What is happening? Is Armageddon coming? Most things have not changed since 21 Sep, except for… In Sep, when S&P500 hit 2,940, the usual concerns were also there, namely...

Read More

Sunpower – price action & bullish divergence warrant a closer look (20 Dec 18)

Dear readers, Some of you have sent me emails to express concerns whether I am still maintaining my blog, as I have not posted an article in the past couple of months. Thanks for the concern and emails. It warms my heart that there are readers who are actively following my blog. Something happened to my family which caused me unable to post articles on a timely basis. (My clients are still receiving some periodic short writeups on the market and specific companies during this period) Anyway, I am glad to be back to work this week! This week,...

Read More

STI has dropped almost 17% since 2 May! Is a bear market coming? (14 Oct 18)

Dear all, U.S. equity markets have logged their worst weekly performance in the past six months. For our local market, STI has dropped 16.7% from an intra-day high of 3,642 on 2 May 2018 to an intra-day low of 3,035 on 11 Oct 2018. It closed at 3,069 on 12 Oct 2018. Is a bear market coming? There are mixed views. Bears are saying that we have not reached the bottom yet. Some perma-bears are even saying this may be the start of the bear market. Bulls are saying that this represents a window of opportunity to accumulate stocks...

Read More

Two interesting stock charts – Best World and Tencent (12 Oct 18)

Notwithstanding the sea of red in the equity markets for the past couple of days, these two stock charts caught my attention. They are Best World and Tencent. Best World – retreats back to double bottom neckline Best World has dropped 9.2% from an intra-day high of $1.52 on 4 Oct 2018 to close $1.38 on 11 Oct 2018. Based on Chart 1 below, Best World is retreating back to its double bottom neckline of around $1.39. This seems to be a classic “break and re-test” resistance turned support pattern. There is a confluence of supports (50D, 100D and...

Read More

Like us on Facebook

Follow us on Twitter