Healthway Medical - A spectacular breakout

Healthway Medical had a spectacular breakout today on very high volume. Closing firmly at 16c, this is beyond the top of the previous cup formation at 14.5c. The relentless buying momentum towards end of the day looks set to continue in the next trading session. The intermediate target of 17c looks attainable. Eventual target remains at 19.5c. This is derived from measuring the trough to the top of the cup formation and projected forward. This is further confirmed by the Fibo lines.

From a FA perspective, a price of 19.5c would mean a PE of about 17x which I believe is more than fair compared to Q&M Dental Group's PE of 37x at 60c!
Q&M Dental Group

I have divested 20% of my position at 14.5c and 15c as a hedge. The rest, I am leaving to ride the wave up. To all fellow shareholders, congratulations!



Here, I would like to share my recent response (with some editing) to a fellow shareholder's question on what might be Healthway Medical's future price movement:

From a FA point of view, Healthway Medical is cheap relative to its peers in Singapore. Compared to Q&M Dental Group, it's very cheap.

However, I also do a bit of TA which says that price action is all about sentiments. So, charts are supposed to be windows to the mass psychology of investors.

People keep saying that Healthway Medical will move to the mainboard one day and, guess what, I agree. However, that is over the longer term. Believing in that longer term prospect of the company will not stop me from taking some profit today based on TA.

Using TA, I hedge by selling some of my position at each resistance level. Usually, it's 10% or 20% of my position per level. It depends on how big a position I have. So, 14.5c is the top of the previous cup formation while 15c was the last high. I sold 10% at each of these two prices. The next resistance is 17c based on Fibo lines and candlesticks. I might sell 10% again. 19.5c, sell again.

As for what is the price going to be after the rights issue. Your guess is as good as mine. I will cross that bridge when I come to it.

Wilmar International

A friend mentioned that he would want to buy some shares of Wilmar International because he is confident that a listing of its China-related operations in Hong Kong will take place and it is just a matter of time.

Wilmar's valuation looks rich to me compared to other palm oil companies like Golden Agriculture. Of course, Wilmar is not a pure palm oil play but most people associate it with crude palm oil. The stock market is not the best place to find rational behaviour, we know.

Let's do a TA. Similar to Noble's chart, the 20wMA pulled away rapidly from the 100wMA. The 20wMA flattened two weeks ago. Compared to Golden Agriculture, which is testing resistance, Wilmar is hugging the flattening 20wMA for dear life as volumes dwindled. If I were to do some crystal ball gazing, this chart shows what Noble's chart might look like in future. For anyone who is thinking of entering, I see $5.54 or so as a fair entry point. It is about a 15% correction from the closing price of $6.43 and it is also a natural candlestick resistance and support level. This is another counter not for the faint hearted.