Earnings Report Trade - Kreuz

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Earnings Report Trade - Kreuz

1. Kreuz (Offshore services)

Kreuz had recently announced contract wins totally US$15.5 million in January resulting in a considerable surge in its share prices. Prices have already risen a whopping 100% since its 2 year low in May 2012. Traders have turned considerably bullish lately again on the nearing of its earnings report tomorrow 21 Feb 2013.

• Large white candlestick last week that has broken a 2 year major resistance line on some trading volume.
• MACD - is high in the positive with some wavering though.
• RSI (25w) - is recapturing 70% high since Oct 2012.
• Short term trade TP - $0.54 (11% from current levels) expected in 1-2 weeks. On the back of anticipated strong earnings, if reported tomorrow, will give the bulls more reason for higher prices. Of course, the risk here is that the company reports lower than expected earnings and prices fall through the support. If nothing drastic, prices could still be supported by $0.47 support levels and it does seem like a decent risk-reward trade.

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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.