Pursuant to my write-up on Swiber on 24 Dec 2010 where I mentioned that Swiber is likely to announce some contracts during the seasonal award season from Dec to Mar, Swiber finally started to announce some contracts since 10 Mar 2011.
Table 1: Contract announcements since 10 Mar 2011
|
S/No
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Contract Announcement Date
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Contract size (US$m)
|
Remarks
|
|
1
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22 Mar 11
|
US$27m
|
|
|
2
|
11 Mar 11
|
US$125m
|
This was the bid whereby Swiber has contention with India’s Oil and Natural Gas Corporation. Eventually, Swiber managed to win the contract.
|
|
3
|
10 Mar 11
|
US$34m
|
|
Source: Ernest’s compilations
Due to the market weakness and lack of contract wins between 20 May 2010 to 10 Mar 2011, Swiber’s share price weakened from $0.995 on 24 Dec 2010 to $0.805 on 23 Mar 2011. Nevertheless, according to Chart 1, it is likely that Swiber is in the midst of forming a double bottom pattern with the neckline at around $0.830.
Chart 1: Swiber’s price chart
Source: Metastock as of 23 Mar 2011
Other indicators such as On Balance Volume (“OBV”), RSI, MACD etc exhibit bullish divergences from 24 Feb to 15 Mar. In other words, these indicators reported higher levels on 15 Mar then on 24 Feb, which is in contrast to the price chart for the same time period. (From Chart 1, you can see that price actually dips back to the same level at around $0.76 on 15 Mar vs the $0.755 on 24 Feb.) This is called bullish divergence which may potentially herald a change in trend.
I have put in the OBV, RSI and MACD charts in Charts 2A – 2C. They are sourced from Metastock as of 23 Mar 2011.
Chart 2A: OBV Chart
Chart 2B: RSI Chart
Chart 2C: MACD Chart
Conclusion – Likely to break neckline $0.83
Based on my personal interpretation of charts, it is likely that Swiber should be able to breach the neckline $0.83 in the short term. If it manages to do so, a measured upside target is approximately $0.90.
P.S: Average analysts’ target price (which is subject to change) is around $1.03.
This is an amended version which I have sent out to clients recently.
Disclaimer
The information contained herein is the writer’s personal opinion and is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided herein do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein are suitable for you. The writer will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials appended herein. The information and/or materials are provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
The information contained herein is the writer’s personal opinion and is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided herein do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein are suitable for you. The writer will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials appended herein. The information and/or materials are provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
Congrats to those readers who have entered into Swiber at $0.830 on last friday. Nevertheless, do rem to take profit accordingly.
According to charts, resistance at $0.89-0.90 (also coincide with measured target px from double bottom breakout) and $0.935 (100D SMA).
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