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Healthway Medical touched 17c, the initial resistance identified yesterday with the MACD indicating a return of positive momentum. However, that the price closed unchanged despite increased trading volume indicates that many holders are making use of the upmove to lighten their positions. A rising MFI shows increasing buying momentum and this is some way from being overbought, suggesting that there might be more upside. 17c is still the resistance to watch. 17.5c is the XR eventual target, the equivalent of the CR eventual taget of 19.5c.
Golden Agriculture closed at 53c, supported by the 20dMA. This pullback is on the back of lower volume, suggesting that the decline is due to weaker holders being shaken out and not due to any drastic distribution activity. However, with the MACD forming a bearish crossover with the signal line and the Stochastics continuing its decline, we might see the 100dMA being called upon to act as support yet. I would accumulate then.
Saizen REIT formed a rare white candle today as price closed at 16.5c with a relatively surprising large buy up in the last trade of the day. The rising 20dMA and 50dMA have merged to form support at 16c, suggesting that this is probably a very strong floor for the counter. MFI has formed a higher low, marking sustained positive buying momentum. MACD marks a return to positive momentum and the Stochastics has turned up as well. Is this the beginning of something more interesting for believers of Saizen REIT or is it another red herring? Time will tell but my investment in Saizen REIT is informed by my FA and I am holding with conviction.
Initial resistance is at 17c, a recent candlestick support turned resistance. Ultimate resistance for the week is provided by the descending 100wMA at 19.5c.
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10 comments:
just fyi, that last order was UBS lifting 0.165
UBS? That is interesting to know. Thanks for the anonymous tip off. ;)
AK71, take a look at drsubaru's analysis posting on sharejunction.
He also mentions about Parkway and Dr Tan See Leng.
http://www.sharejunction.com/sharejunction/listMessage.htm?topicId=7019&searchString=&msgbdName=$%20Healthway
newbie123
Hi newbie123,
His FA regarding the possible union between Parkway and Healthway is highly speculative and there is simply too much guesswork for me.
We must remember that Healthway's foray into China is, thus far, in its infancy stage and the management have listed the numerous possible risks that come with the expansion plan. These should be given due consideration.
Healthway's revenue and profits might be on the rise but I firmly believe that a more accurate measurement is EPS, which has fallen by quite a lot due to the large number of new shares issued. After the share placements are completed, at the market price of 16c, the PE would be 20x, which is similar to Raffles Medical Group.
Without greater clarity as to the contributions which their expansion into China might bring, buying the shares of Healthway Medical at any price higher than 16c would be a bet on future earnings. Fundamentally, I remain convinced that 16c is the fair value of the company's shares until we have earnings figures to suggest otherwise.
Also, when we compare the cash Raffles Medical Group has with what Healthway Medical has (post rights and placements), we have to remember that the EPS of the former is intact which is not the case with the latter. This is why Warren Buffet says that if a company seems to have a lot of cash flow, question the origin of that cash flow. If it is internally generated, it is a sign of strength. Otherwise, it is most dicey.
Technically, it is a different story. Sometimes, a counter's price might not make much sense fundamentally but it does not mean it cannot go higher technically. Look at Q&M Dental and you would know what I mean.
Healthway Medical's initial resistance is at 17c, followed by 17.5c. 18.5c is next and the ultimate bullish target is 21.5c. These are all informed by TA.
At the end of the day, we have to be comfortable with our investments. When I first bought into Healthway Medical in the middle of 2009, it was trading at 10c. Fundamentally, it was terribly undervalued. That picture has changed. Technically, however, I still hope to profit from it.
True. U right, Ak71.
Everything is just pure guessing right now...
We all know about the impact of dilution but surprisingly, instead of trending down, it is trending up. WHY? Is there something happening that we do not know? I guess from the TA, u may have sense massive accumulation of HW stocks for the past few days.
Another thing is IFC, World Bank did placement at 13 cents. The company management will never want the share price to fall to 13 cents, or else it will make it look bad for the World Bank. So, the minimum downside is at most drop to 14.5 cents to 15 cents.
I will be gg to the EGM too on Tue, so maybe we can find some answers to it... Something is definitely gg to happen after the EGM... What happened to Q & M may also happen to Healthway... Healthway price in the next few weeks may not follow the logic of FA or TA... But if this is true, it's time to plan for an timely exit.
newbie123
Hi newbie123,
Apart from FA and TA, I coined an acroynym with some friends before: "HA". This stands for "Hope Analysis". We have to be careful because some FA are actually HA in disguise. ;)
That Healthway Medical's share value has suffered dilution is quite obvious. This is the fundamental picture.
Technically, share prices could move independently of fundamentals as prices reflect the psychology of market participants, not the underlying value of the company's shares.
As an extension of this understanding, the company might not want the share price to drop to 13c but the market does not care two hoots what the company wants or does not want. As an example, it was just reported in today's papers that GIC lost a fortune on paper in its investment in UBS. I'm sure UBS does not want this either.
I will not be attending the EGM because all the resolutions, in my opinion, are done deals. I will not speculate on whether Healthway's shares will trade at lofty valuations like Q&M's shares after the EGM but if you see my latest TA ("Healthway Medical falters while Golden Agriculture shines" dated 5 March) on Healthway's latest price action, you would see weakness and not strength.
Having said this, I agree with your prudence to make a timely exit if Healthway's share price surprises on the upside.
True. AK71, u are right. It's better not to make wild guesses so as not to be over-optimistic, so the unexpected risk is within yr control. Agree that the Hope analysis can be dangerous, just like the herd instincts. But for now, i am trying to think of ways to explain the current trend, by pointing to the observations seen so far. Agree everything is pure guessing at this stage.
From what I know, the IFC has to hold the shares for 10 yrs. I will safely guess that there's a high chance that the directors would not sell a single placement share to fulfill their commitment, convince IFC and maintain their % shareholdings. Thus, the amount of shares available for trading remains almost the same, before and after the dilution, if my assumption holds true.
I saw yr TA. Good one. But it may be too early to say it will falter. Have to watch the chart again on Monday. Notice on friday that HW remains quite strong that no transaction took place at 16 cents? For the past few days, accumulation has been very strong from 15 cents onwards. Don't think the accumulation is just for a 1-2 cents upside.
Those who wants to sell their rights share would have sold off by now. And, those worry about the dilution and the speculation would be taking profits now at 16.5 / 17 cents. 17c will be a very strong resistance and it may take a few days to break. If can break, then that surprise upside may happen. Also, note that there are a lot of bbs manipulating the price of this stock...(as well as a lot of doctors buying it... - the doctors will know what we do not know...)
Whether that upside surprise comes or not, we are still relatively safe, considering the prices that we bought. But if upside surprise comes such that fundamentals don't reflect, safer to unload most of it and wait a while to buy back on dips when market price adjusts back to fundamentals. The dangerous part will always be for those traders who tried to ride the upside in the last part of the cycle... God bless them !!!
From what i know after 9th March, there will be some new analyst coverages coming out... Good story will just move it...
nice chat
newbie123
Hi newbie123,
The proposed IFC loan of US$15m is for a period of 10 years. This is different from the placement shares to IFC. I do not remember there being any moratorium undertakings to be provided by IFC with regards to the proposed share placement. Of course, please correct me if I am wrong and provide the reference for me to confirm.
However, the share placements to the 5 substantial and controlling shareholders will receive a moratorium undertaking not to sell, realise, transfer or dispose any part of the placement shares for a period of three (3) months. Only three (3) months.
As for the TA on Healthway, it shows a reduction of trading volume from 3 Mar to 5 Mar as the counter tried valiantly to move beyond 17c. That represents a faltering in buying up efforts. It does not mean that it will decline next week but it looks weak, as of now. Next week, any attempt to move higher should be accompanied by increased volume. Otherwise, chances of a downturn would heighten.
Finally, I am curious how do you know a lot of doctors are buying the shares of Healthway? I hear from another person that many doctors are advising to stay away from shares of Healthway. ;) All hearsay, I believe. The only type of buying by individuals which I am interested in is insider buying. That tells us something. ;)
Enjoy the EGM and good luck to us all. :)
I haven't gone and read out the placement contracts in detail yet. But i was told by my friend that the placement shares also have to be held by IFC for at least 10 yrs...
Did u notice?
The vol started low this morning.. Until close to 12 noon... volume shoot up from 2.9 million to 11+ million in just an instant... For the past few days, HW still makes it to the top 20 vol stock in SGX...
Market depth will show that ppl have been accumulating millions of shares in it...
bbs is definitely manipulating this counter...
hmm.. does that person work in Healthway or are doctors from other place? I think i told u before. Doctors whom don't work in HW will say avoid it because of the IPO event. But i do know a couple of HW doctors whom have been accumulating this stock and still have not sold a single share yet till now, even in the last rally....
newbie123
Hi newbie123,
I would suggest that you ask your friend to double check or to provide you with a reference regarding his claim as to the moratorium undertaking by IFC for the placement shares. I am intrigued.
I don't look at hourly movement of share prices as I am not a day trader. I usually look at the charts at the end of the day. This keeps me sane. ;)
When the person told me that his doctor friends are asking him to stay away from Healthway Medical's shares, in my usual style, I pointed out to him that I do not base my decisions on hearsay. So, it really does not matter if the doctors are working for Healthway or not.
I have a technique which works and, most importantly, comfortable with. So, I shall stick to it. :)
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