Straits Asia Resources (SAR) has hit the target price of $2.60 after the breakout (see past analysis). SAR is still on up trend but closing in 52 weeks high.
- $2.74 is the resistance and $2.40 is the 50D MA support (also very close to the uptrend support).
- Current PE of 14.95 (base on price $2.69) is at its fair value.
- Recent stock upgrade by CS and OCBC.
Let see whether SAR can break this $2.74 resistance.
SAR was whacked down from 2.79 to 2.55 after Nomura (6/12/2010)downgrades Straits Asia Resources to Reduce from Buy, cuts target to S$2.21 from S$2.80 after lowering FY11, FY12 earnings estimates by 27%, 10% respectively to reflect lower volumes.
Is this counter still good to invest? Thanks
Willy, SAR is not attrative to invest at current PE ratio. It can only be traded as long as the uptrend is intact. Keep a close eye on the chart.
A word of cautious: never use Analysts’s reports to make your investing or trading decision. You can see how the analysts treat the retail investors like clown… one day upgrade and a few days later downgrade, with different assumptions and opinions…
SAR trend reversal is not soley due to the Nomura downgrades. A shooting star has been observed at the resistance level before the announcement of the downgrade. If you look at the candlesticks carefully for the past few days, the bear took charge at the closing.
Straits Asia Resources rebounded nicely from the uptrend support and 50D MA support at about $2.40!