Wednesday, October 6, 2021

Sinopec (0386.HK) set to benefit from rising energy demand.

Crude oil prices reached close to 2014 peaks after the OPEC+ group of producers stuck to its planned output increase rather than pumping even more crude on Tuesday.
Numerous natural events happening across the globe (a freak winter freeze in Texas, lightning strike in Louisiana and hurricanes along the Gulf Coast) have conspired to disrupt production and raise prices of essential chemicals.
Sinopec (0386.HK) being a crude oil and chemical producer is likely to be a beneficiary of rising crude oil and chemical prices.


The stock has since broken out from 3-Year Downtrend!
Last done at 4.06.
Next target 4.09
Second Target: 4.37
Third Target: 4.70

Stop Loss: 3.70 

All posts and charts are for educational and illustration purposes only
Tuesday, October 5, 2021

PetroChina (0857.HK) Breakout from 13 year downtrend!



Last done at 3.97.

Next target: 4.35
Second Target: 4.75
Third Target: 5.11
Fourth Target: 6.30


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Monday, October 4, 2021

Stagflation scare is coming, get ready for it!

A stagflation scarce not seen since the 1980s is coming and we need to be prepared .

Financial Times article: “Italy’s poor households feel the pain of surging energy costs”, 27 September 2021)

Bed Bath&Beyond stock (NASDAQ:BBBY) plunged nearly 25% in Thursday’s trading as supply chain issues dented its second-quarter sales and forced the retailer to cut its annual guidance.Prices of raw materials rose, and coupled with higher freight costs, ate into the company’s profits.

Italian Prime Minister Mario Draghi on Thursday (23 September) announced measures worth three billion euros to keep gas and electricity bills down this winter as power prices soar across Europe.

“In the absence of government intervention, in the next quarter the price of electricity could increase by around 40%, and that of gas by 30%,” Draghi said.

We can expect for govt intervention globally to help consumers weather the effect of inflation.

Natural gas prices in America and Germany have now risen by 117% and 355% year to date, while the China thermal coal price is up 78%

A severe drought in Brazil is set to ravage orange juice, sugar and coffee adding to food inflation woes .

The energy crisis has prompted U.K. Prime Minister Boris Johnson to put the army on standby to ease shortage. China is so worried about the winter that it ordered energy companies to buy up supplies, no matter the cost.

We can also expect the Fed to stick to their lines that inflation is transitory quoting it’s because of the “special circumstances “ that the world is facing and it will blow away soon . Don’t believe it !


While the Fed is “ kicking the can down the road “ and not doing anything to stop inflation , the world is suffering the collateral damage to economic growth, and households’ real incomes, caused by the ambitious energy transition. The global green effort to curb carbon emission is causing a worldwide shortage of energy at a time the world is reopening from Covid pandemic


The energy crisis has prompted U.K. Prime Minister Boris Johnson to put the army on standby to ease shortage. China is so worried about the winter that it ordered energy companies to buy up supplies, no matter the cost.

The Chinese government measures to reduce energy consumption are having a dampening impact on growth , power shortages in China have already spread to 20 provinces as they race to meet emission targets before the Winter Olympics in February 2022 .

The continuing evidence in both America and Eurozone of labour shortages, when combined with the energy price surge, is making another inflation scare seem ever more inevitable and in irreversible at least until mid 2022. This should reactivated the cyclical trade in terms of a renewed outperformance of value over growth and by logic be negative for high multiple growth stocks particularly the overvalued tech stocks in the US market . Stay away from overvalued tech stocks for now !

I think the world is caught flat footed this time with the green effort backfiring and the Covid pandemic had added to the problem . What an ironies , the world is faced with a shortage of the second most abundant element of supplies and there is no easy way out , we need to be prepared and bite the inflation bullet .

By: Robin Ho






All posts and charts are for educational and illustration purposes only
Tuesday, September 28, 2021

ISDN.SI - Long Term Bearish Price Action (Double Tops) Broke below 50 and 200 MA and The Long Term Uptrend Channel


Trade Plan

Last done 0.635

1st tgt  0.615

2nd tgt 0.565

3rd  tgt  0.535

4th   tgt  0.45

 

Add Short at 0.635

Cut loss 0.695

All posts and charts are for educational and illustration purposes only
Wednesday, September 15, 2021

Dow Jones bearish break down today!


After close to 17 months uptrend, DJI finally breakdown of its long-term uptrend channel and below its 50 days Moving average.

Last traded at 34,577.57

Next targets 33525 and 31100 represent a good 3 and 10 percent downside potential represented by the 2 targets in the short term.

All posts and charts are for educational and illustration purposes only
Monday, August 30, 2021

China Internet Sector - Time For Bottom Fishing ?

China internet vs US internet, tales of 2 market . The KraneShares China Internet ETF (KWEB US) vs the US Internet ETF (FDN US) divergence is the biggest since 2016 exceeding even the last significant divergence in 2018.  Just looking for a rebound in KWEB to its 50-day MA would imply 15% upside and a move back to its 200-day MA would imply 49% upside. JD.com (JD US) and Netease (Ntes) display the clearest evidence of stability, bottoming price action and relative strength amongst the china internet stocks following the decline off the February highs and are presented as preferred buys.

 With such unprecedented divergence some analyst are saying the Chinese internet sector is undervalue but is it time for investors to start ploughing into the market? President Xi Jinping’s

new slogan of “Common Prosperity For All” is throwing into question what new regulation will China add to achieve equal wealth distribution and Xi’s calls for higher taxation

has raised concerned making money  could  be politically sensitive. Internet companies, which have been designated as so-called “key software enterprises” (a category including Alibaba

and Tencent), have enjoyed beneficial corporate tax rates of 10% since 2008. Other companies pay a rate of 25%. There is a strong possibility that China Internet companies honeymoon period of 10% taxation may sooner than later be over. As long as investors fear that the China’s regulators are not finish with new requlations  the China internet will need to wait a little longer before bottoming out. September being a traditionally weak month for emerging markets does not support a reversal of fortune in this sector. I believe the seasonal factor points to a Oct – Nov rebound.





All posts and charts are for educational and illustration purposes only
Tuesday, August 24, 2021

SGX (SGX: S68) Price Weakness Is Likely To Persist In The Short-Term.

 



SGX is trading at day low while most index stocks are up on a positive day.


Fund managers are likely to avoid this stock in view of HKEx (0388.HK) announcement yesterday that MSCI China A 50 Connect Index futures to commence trading in the month of October 2021, which is a competing product to FTSE China A50 contract traded on SGX.


SGX weakness is likely to persist in the short term.


SGX last traded S$10.22.

First Target: S$9.81

Second Target: S$9.34 




All posts and charts are for educational and illustration purposes only