Chartered   

Chartered Squeeze

Chartered Semiconductor
July 27 close: S$1.20
OCBC Investment Research, July 27

DISMAL 2Q results, poor 2H outlook: Chartered Semiconductor surprised with a net loss of US$24.7 million (before accretion to preference shares) versus its guidance of a break-even in earnings. We were expecting a net profit (before accretion) of US$3.8 million, in line with the street's estimate. According to Chartered, it incurred a higher-than-expected tax expense from a higher effective tax rate arising from higher-than-expected forecast losses which are non-deductible against taxable income.

Despite the seasonal up-tick in 2H07, Chartered is giving a pretty muted guidance for 3Q07. While it expects revenue to improve 2-6 per cent quarter-on-quarter to US$332 million- US$344 million, it expects average selling prices to fall 2-7 per cent quarter-on-quarter to US$846-US$886, and it is looking to just break-even again.

We already have one of the most conservative earnings forecasts for Chartered in the market, but in view of the disappointing 2H07 outlook, it would appear that even these estimates are unlikely to be met. We are reviewing our 'hold' rating and S$1.33 fair value, pending the outcome of the analyst conference call.
HOLD

 

TA charts-wise, this counter still don't look too good. Acc/Dist and chaikin are stilll trending down

 

I believe the share price will be driven by it's 2Q result, which is due to release on Fri ( 27 Jul) b4 market open. Chartered's guidance for 2Q result  was -$5 m  to + $5 m,  if it maintains the same result as Q1, there's no problem for it to shoot past $1.40. 2nd half forcast is also believed to be better than 1st half.

 

Chartered began its correction in late Feb 07 after hitting a high of S$1.62. Since then, Chartered has been trading within a down-trend channel.

- At this juncture, with the upper band of the channel acting as a strong resistance, coupled with the 50 and 100-day moving averages still trending lower, we anticipate that Chartered may continue to trade with a downside biasness.

- We expect the support level at S$1.21 to hold, as this level had been the point of several price reversals and consolidations over the last 12 months.

- Any break above the upper band of the downtrend channel would face strong resistance at S$1.41. For Chartered to confirm the resumption of its uptrend, it needs to break past the resistance at S$1.41 on the back of strong volume. Otherwise we could very likely witness Chartered slipping back into the channel.

- Support at S$1.21 and resistance at S$1.41.

 

:) singaporegal.

Anyway, agree with singaporegal.  Would only consider it as a possible uptrend if it breaks past 1.36.

 

Wow ray... you're one lucky dude!  

Anyway, Chartered still looking bad to me... despite its rise yesterday. 

 

Gartner downgrades 2007 semi, foundry market growth

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 5/29/2007

http://www.edn.com/article/CA6446988.html?nid=2019&rid=928369085

 

lol Singaporegal, guess what, I DID IT accidentally AGAIN TODAY for Tiong Woon!!!  Haha, lucky for me I made some accidental money!  Talk about luck.

 

Hi rayphua,

Yeah! Same as me... I shorted once accidentally. Luckily I managed to cover back in time. whew!
 

 

Yes... the trend is your friend... :)

I also agree with Cashiertan about  shorting (ie. short-selling)...

So those who have little or no experience in the market at all with short-selling  can take the tip from him...

Then a whole new world of investment may open to you...

Good post, Cashier... :)

 

i disagree abt easier predicting rise than fall. it is trend either rise or fall is easier to predict when trend is in play.

 

Shorting can be by CFD rather than naked short T+4. also with CFD, there is no T+4 binding which allows  u to have same cut lost limit as in long a counter. u can short a counter for as long as u like via non-local CFD co. or 1 mth via local CFD Co.

 

For the bears who can wait, around 1.15 may be a nice entry point f.or a long-term hold.

 

I've only shorted once in 17 years of trading, and it was accidental.  I remember it was for AdvSCT when I oversold what I had not realizing it till the next day.  Was lucky that the counter went downwards the next 4 days and managed to make some even with the 2 bid up penalty.

 

Why is shorting more risky?

Is it because it is easier to predict rises than falls?

 

Shorting is much too risky for my liking. 

 

agree, turn bearish again. if i can i would short it.

 

Chartered is bearish looking. Acc/Dist and Chaikin both resuming downtrend.

 

I sold mine at $1.34 as there are no news to push the price up. This stock may drop back to the $1.20+ region again

The only news that came out last week is to borrow money again.

 

Thanks rayphua. Do stick around and help ppl like me who do not really know much about charts. Cheers!

 

Good call with Amtek ChooHian.  Broke out today.  Maintain buy.  Good luck.