COSCO SHP SG    Last:0.128    +0.003

CoscoCorp

Rallied on talks of some major contract wins.

 

Sell signal for Cosco on the short term is out (Moving average crossover).

 

Fundamental of company is no doubt strong, but for frequent traders, some will "cash out" the profit from the raise in price last week, as we can see from the Acc/Dist analysis as well as from the approaching cross over of the MACD and the shorter termed moving averages like 5/20. Only the current short term trend stated here by me; on the long run, this stock is still on the way North.

 

From my understanding, its competitive strengths and niches put it in an excellent position for the near future. It has cheap access to labour and China is widely acknowledged to be THE next global shipbuilding/repair hub. It has built a strong niche in single-to-double hull conversions, widely seen as one of the most significant changes in shipping requirements, requiring extensive structural modifications. It has a partnership with the world's No.2 rig-builder, our very own Sembcorp Marine, for technology transfer and substructure outsourcing. Would think it's not a sell by any measure.

 

From my short term TA, this stock seem to have flatten out for the few days ahead approaching a possible sell signal, as a means of correction from the recent rise in price. Overbought currently.

 

The $400m worth of high-yield ship-repair, conversion and offshore marine engineering projects secured in the first 6 months of FY06 have already far exceeded those secured in the whole of FY05, underscoring the group capabilities in the highly specialised offshore business.

 

Thank you so much for all that info!

 

Cosco (pg 2) and others....  for your reference



http://www.remisiers.org/research//daily%20%20%20%20ex.pdf

 

Some articles for your reference:::::

http://www.remisiers.org/research//Cosco-010806[1]cgk.pdf

http://www.remisiers.org/research//Cosco010806dbs.pdf



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Could you kindly advise what's a good entry price? Should i be concerned about the possible correction?

 

Cosco's ship repair business in Q2 06 steamed ahead in contributions to overall revenue, at 84%, up from 80% yoy. Average revenue per ship rose to RMB 6.7m in Q2 06 vs RMB 5.0m in Q2 05. This was attributed to higher value jobs undertaken by Cosco Shipyard Group (CSG), eg, double hull conversions and specilaised vessel repairs. Ship repair net margins went up 3% yoy. For dry bulk shipping, revenues remained relatively flat at $36.8m while net margins saw a slight dip to 63.3%.



It'll book another $17m extraordinary gain from sale of 3 vessels to its parent this year. At the Zhoushan yard, work on the new 150,000 dwt dry dock has just been completed, thereby doubling capacity. Two new docks with a combined capacity of 380,000 dwt are to be completed by end '06 and mid '07 respectively, which will bring total capacity at Zhoushan to 1.73m dwt. Over at the Dalian yard, when the new 300,000 dwt dry dock is completed by mid '07, total capacity will also amount ot 1.73m dwt. There will be some possible start-up costs from its aggressive capacity expansion. The expansion will result in greater earnings momentum from FY07 onwards.



A potential restructuring, as Cosco leaves the bulk carrier business in exchange for a larger stake in CSG, could mean more price catatlysts in the coming months. CSG's cost structure makes its yards the most competitive in the world, while ties to SembMar give it a technical edge. Adding the offshore sector's buoyant demand, Cosco is a good investment.

 

Hi Lawrencechoo,

Interesting point... I thought about this "cultural" thing before and wondered if it is applicable in different countries. From my experience, the TA techniques that deal solely on trending (eg. Acc/Dist, RSI, Bollinger) seem to be culture-blind. This is because they are rooted in the mathematical analysis of the price.

I'm not too sure about these chart patterns, though. Because they deal with investor psychology where I guess culture plays a part.... interesting huh..?

Thanks for sharing. Food for thought today.

 

Yah, one more thing. One thing for certain is that the cup/bottom/ head type of pattern analysis will only work for companies which have a very strong fundamental, such as growth of profit of > 20% yoy etc

 

Hi Singaporegal,

I am also exploring this topic, which I am just began reading up on. This group belongs more to a trend analysis type of technic rather than pure technical analysis, based on statistics such as price averages, accummulations/distribution and volume. I guess it's based on reading the history of how certain company's stock pattern behave before they really break out, and the most common pattern they observed so far is the cup and handle followed by the double bottom (such as from Microsoft, Cisco Systems etc). But most of the books on such trend analysis is written by Americans, based on the history of the American stock market, so I really explored how relevant it is for Singapore. I guess it also has to do with the behaviour of the players in the market when they see a certain price behaviour. I am wondering if we Singaporeans will behave like Americans? Will post more on this as I read up and check on this area. 

 

Hi YenYen,

No problem! Glad to help! We're all here to share with one another.

Hey LawrenceChoo,

Do the chart patterns like double bottoms, cup and handle etc.. really work? I'm basically a person who places most emphasis on price trends rather than on candlestick patterns.

Can share with me?

 

i am awed by all that knowledge. i have a lot of homework to do. Thanks for answering my queries.

Thanks to tanglinboy & singaporegal for helping with my ealier queries too.

This forum is cool ..

 

I don't know how others look but personally, I look at the fundamentals of the company first. Thereafter, I will do technical analysis on when is the appropriate time to buy. Used mainly moving averages, first do a short term then a long term. Check the volume, accumulation/distribution chart, then do RSI, and stochastic osc, then finally, a bollinger to confirm if the rest of the chart can be correct (I guess it gives me about 80% confidence). But I am quite new to technical analysis such as cup and handle, double bottom, head and shoulder, which I am currently studying if they are true. Wonder what's the basis that books claim that they are trigger to something great?!.. Purely historical precedent?

 

singaporegal mentioned, a short while ago, that she sees an uptrend from the charts too. So will TA purists buy, even in this current situation? Is there anything that one should look out for?

 

I think I see a cup and handle pattern forming on the Cosco Corp chart. Great things happening??

 

http://www.remisiers.org/research//cos072406.pdf