Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Friday, May 8, 2009

Local Steel Counters Rally: Another 50%?

Local steel counters continue to rally. I predicted Ann Joo will take RM1.80 and Kinsteel to take RM0.80 but didn't expect it happen so soon (refer to my Tuesday post). Lion Ind followed suit.

If you look at current price, it's still half of 52 weeks high price. So I think it has more upside but I could be dead wrong. Anyway, I'm accumulating KNM (RM0.73) and KINSTEEL (RM0.83) until price action reverses. I'm hoping they'll surge past the RM1.00 like Lion Ind (RM1.20). Ann Joo is also my favourite play with good potential earnings.

If you had bought in earlier, continue to accumulate on price weakness. Strategy- buy to average up.
If you had not bought in earlier, buy 1 lot. If uptrend continues, buy to average up. If trend changes, wait for price to recover and sell.
In this forceful rally, I don't expect a sudden violent correction within one day that will bring you huge loss but a gradual correction within a few days. Watch the signal- weak price action over 3 days or downtrend in 3 straight days. Then we know market is consolidating for a new breakout or breakdown.

These counters and that of property/construction counters are the most to advance in a rally.
If you have lost money last year and wants to recoup your loss in the medium/ long term, consider investing (not trade) in steel, cement, property, construction sectors. I really hope you could recover your loss within 12 months.

One property counter to watch is E & O.
Its 52 weeks high is RM1.80 and currently trading RM0.75 and may take RM1.50 if rally persists. There are many others; IJM Land, Sunrise, YNH so pick your choice.

2 comments:

Kelvin said...

kibsteel surged to 90sen today

Remnant 613 said...

kinsteel has moved ahead of the others in the morning but retreated so either kinsteel has to retreat or the other steel counters have to follow..

price action 0.83 to 0.98, then down to 0.84 and rise to 0.89

i think kinsteel is overpriced cf. to others. switching to ann joo, southern steel, perwaja or lion ind.