Mixed Fortunes of Oil & Gas - Ezra, Swissco

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Mixed Fortunes of Oil & Gas

1. Ezra (Oil & Gas)
Ezra's year-start rally had its wings clipped severely after the company reported a 49% drop in 1Q net profit of US$6.8 million on 14 Jan. That resulted in a week tumble and the share price reduction continued this week with strong selling pressure. Despite all the enthusiasm regarding oil & gas counters, it is clear that cherry picking in this time of intense competition will still help the investor weed out stocks that are potential pit-falls. 

• Selling continued this week seeing the stock tumble a further $0.04 from last week's close. In these 2 weeks, share prices have plummeted almost 14 cents. On the fundamental front, stock prices have been hit by poor profits, in canny resemblance to the situation Rotary engineering was in in 2012. Bad news at a fragile time.
• MACD - declining positive divergence with MACD failing to challenge the Sept 2012 peak. Possible turnaround/volatility to ensue. 
• RSI (25w) - perched along the 50% levels
• Short with TP - $$1.09 (-6.5% from current levels) in the near term. If selling pressure still persists, expect the stock to continue down to the next support level at $0.97 which translates to almost a 2012 low.

2. Swissco (Oil & Gas)
Another of my long-tracked counter that only recently staged a spectacular increase in its share prices. Had all along felt a mismatch in fundamentals of the company with the its stock price (almost constant in 2012 after the year-start rally). Nonetheless, it is always an intriguing question to when such an inefficiency will eventually realised in the market - sometimes perhaps never. So happen, the time for this stock seem to have arrived on the back of very thin news. 

• Prices challenged the key support levels at $0.27 last week to close above. This week, prices have shot above $0.30 for the first time though late selling today in the SGX caused prices to fall back to $0.295.
• MACD - MACD has been on the rise for the past 5-6 weeks and does not seem to be waning any time this week.
• RSI (25w) - RSI, though, has hit 70% on the back of a very strong run.
• Long with fast TP - $$0.32 (8.5% from current levels) over 2-3 weeks. Prices are straddling between $0.33 and support by $0.27 with little in between. Still some room more for the rally to run unless selling pressure takes over and prices go back to $0.27 support again.

Jump on the Oil & Gas Bandwagon? Part 2 - Ezra, Kreuz, Rotary

A favorable news article on the Straits Times on Saturday offered some insights into trading this period of quantitative easing from major economies by targeting the (usual) Oil & Gas sector. However, it was highlighted that the favourite pick was not big cap stocks such as Semb Corp, Keppel Corp or Semb Marine. Instead, the article focused on mid cap stocks with good order books and growth potential such as Ezion, Ezra and Swiber. 

Ezion has definitely caught the attention of many traders over the last 1 plus year owing to a managerial and strategy turnaround that has been yielding very decent cash flows, increasing stockpile of cash as well as orders. It was also mentioned in the article that its strategy to have one of the most innovative fleet of jack-up liftboats that provides for offshore industries was a real gem in its managerial direction. Other players such as Swiber and Ezra are companies that been there and done that, very solidly and stably run over the years with a very localised culture but yet international presence. Swiber has an order book of $1.5billion in the pipeline, definitely more than sufficient revenue to last the next 3-5 years.

Of course, there are many other hidden gems that are Oil & Gas players that were not mentioned in the article such as Kreuz, Swissco and, the almost forgotten, Rotary.

Let's take a look at how you can participate in the Oil & Gas rally that has really mimicked the STI's performance over the last year (as seen from the ST news article on Saturday). Listed are technical charts of Ezra, Kreuz and Rotary. For charts on Ezion, Swissco and Swiber, refer to part 1 of this article here.

To buy or Not to buy? - ST Eng, Ezra, Kreuz

To buy or not to buy? That is a big conundrum for traders and investors alike this period.

On a positive note, it is definitely clear that key market indicators are turning positive so far. The STI + HSI + Dow has already rallied some 5-10% from May/June's lows over the last 1-2 weeks, giving suggestions that it could be some time for some bargain hunting. After all, valuations were badly hit over the last 2 months. Furthermore, most large cap stocks have been leading the rally, in a fine display of strength from the market. 
Here comes the dampener - Europe is still in deep trouble and Spain is a huge economy that must not fail. Greece is still stuck in a political deadlock that has resumed this persistent trouble that was brewing since 2008. Moving to the US, its economy is still sputtering while the fiscal cliff from Bush's tax cuts looms large by the end of this year with no signs of a political will to persevere with it. But let's not forget that these pieces of news are already out in the vast open and really, it isn't that new after all.

It is queer isn't it? For all the instability that Greece brings and the malaise in Europe and not-so-pretty-picture-after-all from US, all seems to be well with the market. Let's not forget that the market thrives on its very demand and supply principle; the premise is that markets are perfectly efficient, at least for the Singapore case. With that assumption, it is telling that the markets are making a positive stand towards reclaiming Feb 2012 levels, albeit cautiously this time, without much aplomb. 

It has been a really intriguing week with the markets responding on Monday to Greece and the follow-up today and I have been looking at a few counters that have been really catching my eye for this quick weekly update.


ST Engineering has rebounded over the last 3 days with 3 white big candlesticks appearing. Very positive sign indeed as it looks to recapture the April high of $3.16. From present levels, that is about a 5% upside still possible.

• MACD - Has increased tremendously over the last 3 days.
• RSI (25d) - Just crossed 50%. Very positive too.
• Bollinger Bands - Prices have yet to hit the upper bollinger band.
• 20d MA - Prices have crossed the 20d MA.
• 50d MA - Prices are now challenging the 50 and 100d MA lines. Any further cross will signal even stronger buying pressure.
• Volume - Note however that volumes for the last 3 days' white candlesticks has not really hit any resounding highs.

Ezra has been joining in the market-wide rebound in oil & gas counters with really good days of huge surges in its price. After all, it had been a counter that was really battered down after Feb, losing almost 25% of its value in 2 months. 

• MACD - Has increased tremendously over the last 7 days. MACD is also about to cross the 0 value, signifying even more upside being possible.
• RSI (25d) - Just crossed 50%. Very positive too.
• Bollinger Bands - Prices have hit the upper bollinger band and seen pulling the bollinger bands wider. Even more volatility and potential upside for risk-takers to enjoy.
• 20d MA - Prices have crossed the 20d MA convingingly.
• 50d MA - Prices are now challenging the 50d MA line with little success today. It will seek to re-challenge it tomorrow.
• Volume - Nowhere compared to the year-start rally but definitely on an increase across the last 2-3 weeks.

Kreuz share prices have seen a dramatic rebound from favourable news from its clinching of a project and analyst coverage over the last 2 weeks. It has been joining in the market-wide rebound in oil & gas counters.. After all, it had been a counter that was really battered down after Feb, losing almost 35% of its value in 3 months. 

• MACD - Has increased tremendously over the last 2 weeks. MACD is in the positive region with some slight indication of some possible slowdown after this huge increase. Do keep an eye on the MACD as prices are now high and chasing the boat will require fast fingers to get out.
• RSI (25d) - Just crossed 50%. Still positive.
• Bollinger Bands - Prices have been riding on the upper bollinger band and seen pulling the bollinger bands wider. Even more volatility and potential upside for risk-takers to enjoy.
• 50d MA - Prices have just crossed the 55d MA with some difficulty challenging it over the last 4 trading days. Watch this for more confirmation of further uptrend.
• Volume - First signal of even stronger buying interest came 5 days ago when its volume surged. Volume are still healthy relative to last few weeks.