Tuesday, June 10, 2008

Technical Analysis : Parkson Holding Berhad


Saw the chart while Turtle was going through brokerage reports over the weekend. Turtle is going to do something very dangerous today because he may look very foolish, trying to make technical analysis commentary on Parkson, which is not his cup of tea. Most of the chartist will want to avoid this stock because it is clearly on the downtrend. Those are buying is attempting to catch a falling knife which is a big no no in the world of trading.

Investing or trading requires imaginations of what future look like. From technical analysis stand point, there are two scenarios, one is continue to fall to RM 4 selling at PE of 7 times with estimated EPS of $ 0.50/share. Scenario 2 is continue to bounce around $ 5 - $ 7 (PE of 10 to 14 times). Should one wait until a clear trend is emerging?

If scenario 1 were to happen, Turtle bought Parkson at $ 5.80 leaving himself a potential loss of 32%. Since Turtle is leaning towards fundamental camp, he believe if Parkson is able to grow at the worse case of 15%, the stock will be able to bounce back to $ 7.00(around 12 times PE) in one year time, a potential 20% gain. The biggest fear that Turtle has is misjudge company earnings and not so much of the technical analysis judgment error.

What Turtle saw was a good probability of Parkson to break all time high of $ 10 in 3 - 5 years time. Well, time will tell.

P.S. This will be the first and last technical commentary to avoid further embarrassment. Have a nice day!

5 comments:

Leontan said...

I'm one of your readers and the posting you did on Post Election - 100 days reflection, could not describe any better. Thank you.

Turtle, i believe technical analysis is useful and can be a valuable element of fundamentalism in a dirty market such as KLSE. I believe TechniMentals is the way to survive here.

Through my observations and personal opinion, there is no need to be embarrassed about TA :) i've came to realised that the principles of fundamentals in the books we study, though enlighting, may only be applicable to companies in the US. Because, these investors experienced investment there and is somewhat likely different from here.

If i'm sourced correctly, Warren Buffet once said he wont buy companies overseas if he couldn't understand their culture. Malaysian Culture vs US Culture? Malaysian insider trades is too frequently common vs the US. Or even people who run companies in Japan differ from Hong Kong.

Take a look at Tenaga. Even before AAB announcement, we start to get accumulation of large buy volumes. Does fundamentalism comes to play? or is it technicals which tells us many things we dont know yet.

Btw, this is just my thoughts. In the long run, we would all generally agree fundamentals for Parkson is good. Just the entering part, we need technicals. :) :) :)

Turtleinvestor said...

Don't get me wrong, not that I'm embarassed about usefulness of TA but it is out of my competency is the problem. I'm not going to embarass myself and mislead my readers with inaccurate analysis. Cheers.

KC said...

Parkson at 5.55 if cheap, at 5.0 is very cheap, below 4.60 dont watch, just take it.

Leontan said...

Turtle, apologies from my side :) didnt mean to get you wrong. I'm humbled with your reply. Appreciate your postings. Thanks. Cheers:)

itsme said...

Hi Turtle:
Just thought I should share what I just read a moment ago about PARKSON buying back its own shares i.e. share buy-back @RM5.00 per share a few days ago.
Have a nice day !

itsme...