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Wilmar's share price broke resistance at $3.64.
Volume has been declining as price pushed higher. Remember, volume is the fuel that drives rallies. Without rising volume, rallies could eventually sputter and die out. However, Chaikin Money Flow shows that smart money is still flowing into the counter.
The conflicting signals here suggest that Wilmar could do a correction using time and we might not see any hefty price correction. In case a price correction should take place, immediate support is at $3.64 and a stronger support is at $3.53.
The rising 20dMA will intersect the declining 200dMA at some point in the near future to form a golden cross. This suggests that the bulls have the upper hand and that any retracement in share price is likely to attract much buying interest.
It is always dangerous to try looking into the future with technical analysis but let me see if I am clairvoyant. With a healthy dose of patience and with a bit of luck, we could see $4.44 tested in the next two or three months. There. My powers are spent.
Related post:
Wilmar: Testing resistance with strong momentum.
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Maybank Kim Eng upgraded palm oil company Wilmar International to ‘buy’ from ‘sell’ and raised its target price to $4.65 from $2.75, on expectations its earnings will improve along with a recovery in its biggest market China.
Expectations of low crude palm oil (CPO) prices in 2013 will benefit Wilmar, as it is a net buyer of CPO, although it owns some plantations, Maybank said, adding that lower feedstock cost will likely improve margins of its refining, trading and consumer divisions.
An improvement in China, which accounts for almost 50% of Wilmar's revenue, will boost the palm oil company and its plans to cut back capital expenditure will strengthen its balance sheet.
“With China’s soybean imports hitting a surprising high towards the end of 2012, we believe earnings surprises lie ahead,” said Maybank in a report.
- REUTERS, 18 JAN 12.
Wilmar has posted a much stronger-than-expected set of FY12 results.
Although reported net profit was down 21.6% at US$1255.5m, core earnings at US$1167.0m (down 23.1%) were still 14% ahead of our forecast.
We note that the outperformance came mainly from a 32% jump in PBT from its Palm & Laurics division; this driven by the revised Indonesian export tax structure.
... declared a final dividend of S$0.03/share (versus S$0.031 last year), bringing its total dividend to S$0.05 for FY12, or 18% lower than last year.
Going forward, management remains “cautiously optimistic” about its long-term prospects.
Buy rating and S$3.52 fair value UNDER REVIEW.
OCBC Research, 22 Feb 13.
Wilmar today said it’s forming a joint venture with Noble Group, Asia’s biggest publicly traded commodity supplier by sales, to develop and operate palm projects in Papua, Indonesia. Palm oil, the most-consumed cooking oil, plunged 23% in 2012 as stockpiles expanded and demand weakened.
Wilmar will take a 53.7% stake in Noble Plantations, which owns a majority stake in a company holding 22,953 hectares of land in Papua, the companies said today in a joint statement. It didn’t state how much Wilmar is paying.
Bloomberg, 22 Feb 13.
4Q12 core jumped 51% yoy and 3% qoq with higher contributions from its palm & laurics segment.
We expect better performances in FY13 as palm & laurics should benefit from expanded refining capacity, current high stock and a new export tax policy in Malaysia.
Consumer products should also gain from lower feedstock costs while the oilseeds & grains business is expected to enjoy better margins.
The 4Q strength marks the start of its earnings recovery in most segments.
Maintain Outperform with catalysts expected from its continued earnings recovery in FY13.
Source: CIMB
Wilmar (F34.SG) closed down 3.8% at $3.30, with an analyst saying the decline follows news Norway’s NOK3.82 billion ($832 million) sovereign wealth fund pulled out the shares of 23 palm oil companies due to concerns over deforestation.
Thomson One data indicates the fund previously held around 0.25% of Wilmar’s shares outstanding, or 16.3 million shares; the fund’s website indicates it no longer holds any Wilmar shares.
Dow Jones & Co, Inc
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