Dear all

With reference to my market outlook published on 3 Oct 2021 (see HERE) where I cited opportunities in our Singapore market, our Singapore market (represented by STI) has jumped 154 points, or 5.1% since 1 Oct.

Amid the recent strength, is it too late to plough into the markets? Are there still stocks who may have further upside? Based on my personal chart observation, GSS Energy, China Sunsine and Sing Medical have interesting / bullish charts’ setups which may be interesting to take a look.

 

GSS Energy

Based on Chart 1 below, GSS seems to be on a firm uptrend, evidenced by the rising trend line and its rising moving averages. Volume expanded on “up” days whereas volume shrank on “down” days. Indicators such as OBV, MACD, MFI and RSI are making higher highs and higher lows. ADX last trades at 49.4 amid positively placed Dis. Chart will look rather bullish if it can breach $0.082 with volume expansion and on a sustained basis, with the next near-term resistance at 0.085 / 0.090.

A sustained breach below its rising 50D SMA (currently around $0.073) negates the bullish feel on the chart. Readers can refer to my write-up on GSS HERE for more information on the company.

Near term supports: $0.078 / 0.077 / 0.075 / 0.073

Near term resistances: $0.082 / 0.085 / 0.090 / 0.093 – 0.095

Chart 1: GSS Energy seems to be on a firm uptrend

Source: InvestingNote 28 Oct 21

 

China Sunsine

Based on Chart 2 below, Sunsine looks interesting as it has been hovering $0.485 – $0.545 in a rectangular trading pattern since May 2021. Indicators are strengthening and barring unforeseen circumstances, it may be a matter of time before it breaches $0.545. ADX has been generally rising and last trades at 27.3 amid positively placed Dis. Except for its 6D EMA, all the other moving averages which I track are rising and share price is currently above these moving averages (but still below its 6D EMA).

A sustained breach below $0.485 with volume expansion negates the somewhat bullish feel on the chart. In a report dated 20 Oct, CIMB raised target price for China Sunsine from $0.680 to $0.770, citing rising average selling prices, pointing to a stronger 4QFY21F. CIMB also estimates that Sunsine may post a 3Q21F net profit of Rmb93m (-34% qoq, +55% yoy).

Based on analyst reports, Sunsine has no debt. Based on Bloomberg dated 27 Oct, it trades at 5.3x FY21F PE and 0.77x P/BV. Its peer Shandong Yanggu Huatai (300121 CH) trades at approximately twice its valuations at 9.9x FY21F earnings and 1.9x P/BV. Furthermore, Sunsine has net cash amounting to approximately $0.283 / share. I.e., at the last price of $0.515, 55% of its market cap is backed by cash.

Based on Bloomberg (see Fig 1 below), average analyst target for Sunsine is at $0.730. If the analysts are correct, this represents a potential capital upside of around 42%, compared to its last traded price $0.515. Readers can refer to the analyst reports HERE for the analyst reports.

Figure 1: Average analyst target for Sunsine is at $0.73; 42% potential capital upside!

Source: Bloomberg 27 Oct 21

Near term supports: $0.510 / 0.500 / 0.490 / 0.485

Near term resistances: $0.530 – 0.535 / 0.545 – 0.550 / 0.575 / 0.590

Chart 2: Sunsine consolidating in a nice rectangular trading pattern since May

Source: InvestingNote 28 Oct 21

 

Sing Medical (“SMG”)

Based on Chart 3 below, SMG has hovered for more than six months around $0.300 – 0.310. Since late last week, it seems to be creeping higher with volume expansion. Moving averages have compressed together due to its tight trading range for the past few months. Indicators are slowly but steadily strengthening, and it may be a matter of time before SMG can rise above all its moving averages and test its recent high of around $0.335. A sustained breach above $0.335 points to an eventual technical measured target of around $0.365. This may not be reached immediately.

Conversely, a breach below $0.300 with volume expansion is negative for the chart.

Both UOB Kayhian and Fund Supermart have a buy target price on SMG at $0.480 and $0.430 respectively. Average analyst target for SMG is at $0.455. If the analysts are correct, this represents a potential capital upside of around 44%! Readers can refer to HERE for the analyst reports for more information

Near term supports: $0.315 / 0.310 / 0.305 / 0.300

Near term resistances: $0.320 / 0.335 – 0.340 / 0.350 / 0.365

Chart 3: SMG – base building around $0.300 – 0.310 for the past 6 months

Source: InvestingNote 28 Oct 21

 

Conclusion

It is noteworthy that the above is written based on my personal observation on their charts and less emphasis on their fundamentals. There are risks involved in trading or investing, especially in small mid cap stocks. Readers should refer to the above links and do their own due diligence. Furthermore, chart observation or analysis is subjective to some extent.

P.S: I am vested in all three companies. I have also highlighted all the above companies earlier to my clients with more info.

 

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Disclaimer

Please refer to the disclaimer HERE