The Rich Kid Wannabe

Monday, December 6, 2010

Will OSIM Dual Listing Plans Cause Price to Continue Rising?

This art of resting the mind and the power of dismissing from it all care and worry is probably one of the secrets of energy in our great men.

~ Captain J. A. Hadfield

For those of you unfamiliar, OSIM is in the business of creating products designed to increase your well-being. They are known mostly for their massage chairs being the biggest maker of massage chairs in Asia, outside Japan.

The company has been doing constant share buybacks as far back as Dec last year before the recession was declared over. Most notably, the company has made more frequent share buybacks since May this year. These share buybacks have increased shareholder value by increasing its earnings per share (EPS). Do note that this does not mean the company's profits is increasing as profits may remain stagnant despite rise in EPS. OSIM however, has shown strong increase in its earnings announcing an 86% rise in its 3Q earnings y-o-y despite sales being "marginally down" attributed to the conversion of its GNC Australian subsidiary into a franchise outlet.

OSIM has been rather flat since Mar this year despite the buybacks. However, the increase in profitability in the 3Q seemed to serve as the catalist to cause the share price to rise once more. The share price has been in an uptrend since the 3rd week of Oct.

From the chart, we can see the clear uptrend, supported by the 14 day moving average. However, Stochastics and MACD indicators show that the share has been overbought for a long time now. MFI & OBV indicates strong accumulation with MFI soon to reach the overbought zone too. However, despite being overbought, ADX shows that this trend is still very strong. Even when prices seemed to be dipping on the 30th of Nov, news of their dual listing in Taiwan caused the price to bounce higher once more. (For further readings on OSIM, pls refer to links at the bottom of this post.)

In the near term, stock price should continue trending higher. But with decreasing volume, there may be a correction at hand. Hopefully the rising 14dma will help support it. A break below the 14dma, may see prices dipping to the next support at $1.28.

Not vested. Just charting for practice. If there's any comments or corrections, pls feel free to post below.

Happy Monday everyone =)

Osim CEO Sim targets brand acquisitions to bolster China sales
Wednesday, 01 September 2010

Osim posts 86% rise in 3Q earnings to $13m
Thursday, 21 October 2010

Osim International up on TDR listing plans
Thursday, 02 December 2010

Weekend Comment Dec 3: Osim goes to Taiwan
Saturday, 04 December 2010

Singpost - Downtrend to continue?

Experience is the name every one gives to their mistakes.

~ Oscar Wilde

I can't argue with that quote above. I blogged about Singpost a couple of days ago and said that I think it'd trend higher from the indicators (See Singpost Rebounding Strong for that big boo boo of an analysis). Thankfully JW, who runs his Wealth Buch blog and a far more experienced technical investor than moi, pointed out the error of my analysis and pointed out such an obvious downtrend channel, I felt so dumb that I had totally missed it. But thanks again JW for highlighting my mistake.

As you can see from the graph above, after Friday's trading day, JW was proved more than just right but accurate too. I've much to learn still and I hope that any of you who spot any more of my disgusting errors can point them out too.

On the bright side, after some thought on why I failed to realize the obvious, some lessons I've learnt are 1) not to analyze in a rush or when I'm tired, 2) to admit your mistakes early, 3) look at the chart first, indicators second and 4) not to let vested interest blind side me into seeing only what I want to see and not what is really there.

Well from Friday's chart, all indicators have turned downwards too, an indication that it's a strong probability the selling will continue and prices could very well fall below the 200 day moving average, supporting at $1.13.

In the long term however, prices look set to reach the 50 week moving average, which stands at $1.11 and is a rather strong support. Perhaps we would see a bounce at this price. However, falling through this support could see price dip to the next support at $1.07.

You all take care now and have a good week ahead.