Tuesday, June 19, 2012

Weekly Stock Call - Ho Bee Properties

Ho Bee has a strong presence in Singapore largely servicing the higher-end residential market with a strong footprint in Sentosa Cove areas. It also has some 40% of is revenue derived from China, mentioned by a Maybank analyst report 21 March 2012. With the property sector leading the rebound in this jittery but yet upward-trended market over the short term (at least), Capitaland, Kepland, Yanlord, Ying Li have all clocked huge gains over the last week. Even Yanlord and Ying Li with huge presence in China have began to see more market buying pressure despite the cooling measures that the market has perhaps already discounted. In that light, Ho Bee, and OUE as well, is presenting a very solid case for continuation of the property rebound given it being still shy of the limelight and trading at considerable value. Is it time to get into a seemingly undervalued property counter to join in the rebound?

Outlook - Buy with a longer time horizon; laggard play. Technical indicators are aligning to put this stock on a upward trajectory at least for the next 1-2 weeks. Good risk to profit ratio observed that makes the plan more attractive. Finally, Ho Bee has been lagging in this property rebound and begins to present a cheaper valuation alternative to the already more expensive peers of Yanlord and even the big guys such as Capitaland and Keppel Land. But do not expect fireworks from this stock as it is still pretty quiet from the public eye; prepare to hold for lasting effect.
  • MACD - Is trending upwards for last trading week for both daily and weekly charts.
  • RSI (25d) - Just rebounded off the 30% levels and steadily trending upwards to the 50% level.
  • Bollinger Bands - Prices have rebounded off the lower bollinger band on 8 June. From today's close to the lower bollinger band is a -4.7% downside. Risk is well managed.
  • 20d MA - the 20d MA has clearly stabilised in the downward direction and there is some good suggestion of a local minimum.
  • 200d MA - Prices are still 5.7-6% away from the 200d MA as compared to most property stocks that have prices already crossing the 200d MA. In this jittery market, anything can happen and it will be more attractive to pay attention to undervalued peers.
  • Major Support - Prices seem to be resisted by a diagonal support line that provides an even better risk management framework to go into the trade with clear stop loss at around -5-6% trade value.
  • Volume - A huge surge in volume occured today (18 June) indicating a possible bigger move in time to come.

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