Technical Analysis of HWAWELLTEX on 23 Dec 2016

Technical Analysis of HWAWELLTEX on 23 Dec 2016

This is no buy/sell recommendation - just a trial to see if Technical Analysis (works to an extent) in Dhaka Stock Exchange.

The low volume (and name) of HWA never interested me. However, there was a break out on 22 Dec 2016 on somewhat higher volume.

Thus, I tried to study it.

Fundamentally, I would say it is an OK (to good) company.

• Profit is slightly above 100 Mn mark
• EPS slightly above 2
• It has low liabilities
• Annual Cash Dividend is 15% - which I like very much

  

Profit	2013	2014	2015	2016
Annual	128	158	116	113
EPS	2.29	2.82	2.08	2.02
Dividend		15%C	15%C	15%C
NOCFPS		0.9	7.4	2.3

But I could not find any growth story except:

• It’s Annual Production Capacity is 10.61 Mn KG while Actual Production in 2015 was only around 4 Mn KG (thus, there is potential to double production) – taken from 2015 Annual Report.
• Decided to procure approximately 150 decimal of land adjacent to factory premises at Kashorgor, Seed Store Bazar, Habirbari Union, Bhaluka, Mymensingh for future expansion of the factory – Source DSE website on 1 Feb 2016.

Currently market is valuing it at 18 PE – a bit high at the moment.

But Technical formation seems to suggest it might go higher!

Generally Technical indicators are lagging indicators (however, price adjusts in the expectation of change in Fundamentals).

However, I could not find any concrete growth story to justify HWA’s expected rise (probably the market is showing its true colors and becoming inefficient – I will tackle Eugene Fama's EMH in a later article).

Now, if we look at the three year weekly chart, we see that Volume surge broke ~37 Resistance (which should be a support from now on) on 22 Dec 2016.

Now if it retraces on low volume to around 37 and then goes up, there is possibility it might reach the following targets – 44 to 45, around 50, even near 60 – considering the bullish trend of the market.

So it might be for the Risk-taker/speculator (stop loss if it goes below 35.6).

Let us see what happens . . . 

Mutual Fund Sector in Bangladesh – TV interview

Mutual Fund Sector in Bangladesh – TV interview

This interview might be interesting for MF chasers. With the bull market running, some MF might give good returns in coming weeks.

Mr Shahidul Islam, CFA, CEO of VIPB Asset Management Company Limited (which run the best MF in my view – NLI1STMF and SEBL1STMF).

Mr Emran Hasan, MD & CEO, AT Capital Partners Asset Management Limited (another good MF in Bangladesh).

Mr Ahmad Rashid Lali, Director and Vice President Dhaka Stock Exchange Ltd., Bangladesh.

https://www.youtube.com/watch?v=R5LIk4t44MQ

Enjoy . . . 

Technical Analysis of DSE Index on 22 Dec 2016 - Retracement scenario

Technical Analysis of DSE Index on 22 Dec 2016 - Retracement scenario

Currently, the market is strongly bullish. Thus, we could see the following scenarios:

(+) The present herd mentality keeps hold and Index remains Bullish; the party goes on; enjoy!

(-) However, I think we should also plan for a retracement scenario; if the index takes a breather.

Let us assume where the Index might reverse. Previously I had written about it in this article: http://imti77az.blogspot.com/2016/12/trying-to-predict-un-predictable-don.html

Again the market fooled some of us Technicians by resting around 4970 instead of expected 5000. 

Whether it was profit-taking and/or supply, today’s bold candle seems to have snuffed out supply at 4970. However, let us be prepared for retracement from either 4970 or 5000.

Now if we look at Fibonacci Retracements, it seems the Index might reverse from the following areas. 

I would expect it to reverse from around 4800 to 4844.

It might be an opportunity for traders to re-position one’s portfolio – by taking profit of stocks that have risen too high and trying to find stocks that are lying low (preferably around support). Or those who entered at low prices, could hold for future gains. It depends on the individual’s strategy.

Let us see what happens . . . 

Don't worry - be Happy ... if it keeps on rising . . .