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Wilmar: A rebound or something more?

Saturday, October 13, 2012

Wilmar is up 3.9% at $3.18 as players await further details from the Malaysian government on a CPO export-tax cut. "It's one of the better companies in terms of having feet in both Indonesia and Malaysia and (being) able to trade around any opportunities from that" on the potential tax change, an analyst says.

He adds, the slightly improved soybean supply-side numbers from the U.S. were also positive for the stock as soybean availability is key for Wilmar. He notes the stock is starting from an overly depressed position and a number of players are "relooking" it after its selloff.

Dow Jones & Co, Inc, Friday, 12 October 2012.

I don't like to sell as share prices form new lows. It just doesn't make sense to me. If I want to reduce exposure in downtrends, I would wait for rebounds as prices test resistance. After all, prices go down a river of hope.

I do not know if Wilmar's share price would continue to strengthen or how much it would rise if it should happen, of course. I just have to do what I plan to do if it happens.


I like to potter around a bit with charts and using the Fibo fan, the chart shows that price broke resistance in the last session but mostly retreated to close just slightly above resistance. A continuing rise in share price next week looks rather iffy. If it should happen, next target is $3.28

Of course, we can also say the the confluence of the 20d and 50d MAs at $3.20 is a formidable barrier. This could be the case but in a situation where price is no longer trending, MAs are weaker tools. I would turn to momentum oscillators in such instances for clues.

For anyone who thinks that Wilmar's share price is experiencing a blip in positive movement and that it is on its way lower, I won't be too sure. Look at the MACD which is a price momentum oscillator. It just formed another higher low. It shows that negative momentum is continuing to weaken.

The ADX shows that there is no trend per se and if there is any, it is a weak one.

What I can say for sure is that Wilmar's share price is going through a long drawn basing process. When is it ending? It will end when it ends.

Related post:
Wilmar: Is the tide turning as buying pressure returns?

17 comments:

FoodieFC said...

hoping for a rebound =)

AK71 said...

Hi FoodieFC,

I am sure all of us are hoping for the best and the best could mean different things for different people. ;)

AK71 said...

Martua Sitorus, COO, bought 2,000,000 shares in the open market on 8 Oct 12. $3.18 per share.

FoodieFC said...

..he is rich!

AK71 said...

Hi FoodieFC,

I am sure he is very, very rich.

AK71 said...

U.S. agribusiness Archer Daniels Midland Co and Wilmar International, the world’s largest listed palm oil producer, said on Thursday they completed regulatory approvals for a partnership in the global fertilizer and European vegetable oil sectors.

To be based in Rolle, Switzerland, the partnership along with another in global ocean freight will collaborate on purchasing and distributing fertilizer globally, and in selling and marketing vegetable oils and fats in Europe.

“These new partnerships will help strengthen our global marketing reach, while delivering a best-in-class service to our customers,” ADM Chief Executive Patricia Woertz said in a statement. “We are confident that synergies with Wilmar will create a distinctive value.”

The two companies have been working together since the mid-1990s, when they jointly built a network of soybean processing operations in China, the world’s largest importer of soybeans. ADM owns a 16% stake in Wilmar.


REUTERS, 18 OCT 2012.

Jay said...

Hi AK:

I'm having Wilmar on the watchlist as well. I got into Noble a few months ago; the and their dissapointing numbers already and seem to have a stronger management, and so far that has paid off vs Wilmar and Olam. But still keen to get these 2 counters in as well.. After the REIT/property run this year which has served me well, I'm wondering if commodities coutners could make a nice rebound next year..

Wilmar back to 3.15, I think I want to place an order soon...;-)

Jay

AK71 said...

Hi Jay,

Wilmar is another counter I got in too early. I have been buying as its price declined. The last purchase was at $3.00.

You are definitely in a better position going in only now. ;)

Jay said...

I guess you are alluding to going in only after a stock has consolidated, and shows clear signs of bottoming-out? Would you say that is the case for Wilmar now?

In any case: who is complaining to have bought Wilmar at 3.00?? ;-) I think that was their lowest point..

I probably will place an order at 3.14 for next week...

AK71 said...

Hi Jay,

The charts show signs that the share price is basing. It is harder to say if it has hit bottom although negative momentum has clearly weakened. The bears are definitely not as enthusiastic as before. :)

Well, $3.00 was not my entry point. I started buying at $4+. -_-"

Jay said...

Yes yes, I hear you.. I had them on my radar already before the big drop as well.. fortunately my laziness was in my favor this time (I'm sometimes wondering if lost opportunities are bigger than avoided losses...haha)

Let's hope that all those who want to sell have sold already, and the stock is ready for a bump-up at some point....

AK71 said...

Hi Jay,

Oh, I know what you mean. Sometimes, just waiting for a counter to drop to a certain price just didn't pay off simply because price didn't drop that low. Then, off it zoomed higher. o_O

Well, you are indeed lucky this time if you were really lazy. I somehow suspect that you are being modest. Haha.. Anyway, good luck to us all. :)

AK71 said...

Singapore palm oil producer Wilmar International reported a 26% rise in third-quarter net profit on Friday, with its oilseeds and grains business turning in a profit after two quarters of losses.

Wilmar, whose other businesses include sugar and edible oils, earned US$405.8 million ($497 million) for the three months ended September, up from US$321 million a year earlier and US$117 million in the previous quarter.

Wilmar’s third-quarter result beat the average net profit forecast of US$335 million, based on a Reuters poll of five analysts.


REUTERS, 9 Nov 12.

Solace said...

Hi ak,

Wilmar stock has been performing well for this week.

However, I saw a piece of negative news today.

http://www.greenpeace.org/international/en/press/releases/Palm-oil-giant-Wilmar-caught-in-forest-scandal---Greenpeace/

What do you think of it? I believe companies with good sustainability practice is the way to go in the future. I once read a report that companies with good environmental practice tends to do well in the long run

AK71 said...

Hi Solace,

I won't be too worried. Wilmar is a relatively small upstream player in the CPO world. They buy more CPO than they produce.

I am more excited by the fact that Wilmar has become a much bigger player in the world of sugar and how they could possibly benefit from price rising from the very depressed levels today. :)

This event, if it should result in a steep decline in Wilmar's share price, could provide an opportunity to accumulate. ;)

Solace said...

Haha, the fire at brazil provides a catalyst indeed.

AK71 said...

Hi Solace,

If we believe that Wilmar will still be here 10 years from now and doing better than now, we just have to hold on to our long positions. :)

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