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Anyone who has been following my blog would know that I have a preference for Golden Agriculture over Indofood Agri. The former is more of a pure CPO play and I have said that demand for oil will improve over time even in a weak economic recovery. Therefore, CPO is a natural beneficiary. As Golden Agriculture is the most levered to the price of CPO amongst all the CPO companies listed on the Singapore Exchange, fundamentally, it would outperform if CPO price stays high. In terms of valuation, Golden Agriculture remains the least expensive CPO play as well.
Today, its price closed at 57.5c which is where we find the rising 20dMA. Although the MACD is declining and has completed a bearish crossover with the signal line, it is interesting to note that OBV has formed a higher lower. It seems that distribution is weakening. Of course, the higher high on the MFI is still valid.
Drawing an uptrend line from the low of 7 Jun, it is easy to see that a support that approximates the rising 50dMA. This should be a very strong support. However, it might not be tested if the 100dMA holds up as immediate support at 55.5c.
Indofood Agri target lowered to $2.31 by Daiwa. Daiwa notes management’s warning of weaker margin for cooking oil in 3Q10 due to 5% price cut at end June. Keeps Hold call: “While we are bullish about the palm-oil sector, our main concern is IFAR’s relative valuation compared with those of its peers.”
Thursday, 12 August 2010
Thursday, 12 August 2010
© 2010 - The Edge Singapore
By OCBC Investment Research, 12 Aug 10:
Golden Agriculture: Company Update.
Related post:
Why Golden Agriculture?
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