Monday, August 10, 2009

Some H-shares to consider when the market correction is over.

As I write now, Hang Seng is already up by over 400 poinbts, signalling that the correction could soon be over.
Here are some counters worth a look:

Counters Fundamentals Technicals
Ju Teng Largest casing manufacturer in the world. Unattractive at the moment
To benefit from worldwide tech recovery.
Currently less than 10 times FY2009 earnings.

Shanghai Jin Jiang Major beneficiary of the Shanghai Expo. Unattractive at the moment
Trading at a fraction of its revalued book value.

Guangzhou R&F Has built decent-sized land bank. Monetary Showing signs of oversold.
loosening has provided firm with easier HK$15
credit and earnings are likely to be supported
by gains of improvement in land-volume sales.

New World China Land Develops and invests in properties in China Showing signs of oversold
and has land bank of 19 m sq. m. Expected to HK$4.40
benefit from rising prices and transaction
volumes.

New World Department Balance sheet is strong and operates 33 stores Not ready yet.
Store in 17 cities. Selling at a PER in the mid teens.
Hard to find such an attractive stock.

Yip's Chemical Cheap as well, since it is trading at Unattractive at the moment
single-digit earnings mulitples.

What will I do?
There are only 2 counters worth considering now. Of the two, only Guangzhou is available for trading on my platform. Therefore, my choice is automatic.

Guangzhou started its correction end July, and is now sitting on its 23.6% Fib retracement line. This is also the channel support line.
Its stochastic is in the oversold region. Buying now, I would enjoy IT fair prices, but gains could be limited to the immediate resistances of the 10, 20 and 50-day MA lines, followed by the year high of 18.98.

When to buy?
If prices could close with a white candle(preferably long one), I would buy tomorrow. My trades would be as follows:

Qty: 2 lots
SL: about 13.50-13.80
TP1: 16-16.30
TP2: around 19
Profit: abt S$900


Seems doable.

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