China Stocks Crazy Rally

China is the greatest economic growth story on the planet... and a marketer's dream: One billion hard-working Chinese people coming on line in the global economy. This enormous potential draws in enormous amounts of hot money from traders... which causes Chinese stocks to boom and bust like crazy.

How much longer will this new run last? Nobody knows. Most China watchers consider the market overvalued. But this is China folks... And as you can see from the huge gain in 2007, when Chinese stocks run, they like to run a long way (Copied from Brian Hunt's Market Notes).

Commodities Index Staying Above 200day MA

Commodities index CRB continues to stay above 200 day MA. Crude up at 71. Gold up at 945. Dollar index slightly down at 79.9

Gold Stocks: Jeff Clark's Buy Point

We're borrowing an idea from Jeff Clark for our chart of the week...

Jeff is one of the few traders we've ever seen who consistently trades the short-term movements in gold stocks for profit... so we always pay attention to his opinions on the sector.

Just a few days ago, Jeff updated his readers on his "wish price" to buy more gold stocks. As you can see from this week's chart of the gold miners fund (GDX), gold stocks are in a confirmed uptrend since last December. Each time they dip down to their trendline, they tend to rally higher.

Jeff's target buy price to get the GDX "on sale" is around $33. If you're looking to trade gold stocks, keep an eye on that number.

O n G. PANTECH, DELEUM

Pantech
EPS = net profit 59m/ shares issued 375m = 16 sen
Dv = 3 sen, dv yield = 4 %, "fair price" = 3/ 0.04 = 75 sen
PE = current price 85/16 = 6
NA = RM0.53

Deleum
EPS = 30m/ 100m = 30 sen
Dv = 11 sen, dv yield = 7 %, "fair price" = 11/0.07 = RM1.57
PE = 166/30 = 6
NA = RM 1.46

KLCCP, PLUS, BJ TOTO

KLCCP
EPS = net profit RM 836m/ 936m shares issued = 89 sen.
PE = current price 3.20/0.89 = 3.6
Dividend = 10 sen. Dv yield = 3 %. "Fair price" = 10/0.03 = RM 3.33
Net asset = RM4.36
Current price of RM 3.20 is a good buy.

PLUS
EPS = 1080m/5000m = 21 sen
Total dv = 16 sen, dv yield = 5 %. "Fair price" = 16 / 0.05 = RM3.20
NA = RM1.14
Final dv 9.5 sen goes ex. 9th June, pays 2th July

BJ TOTO
NA RM0.26
EPS = 348m/1351m = 28 sen
Total dv = 26 sen, dv yield = 5 %
"Fair price" = 26/0.05 = RM5.20

Euro/Dollar: Prices Break Channel Support, Signal Short

The Euro has been trending higher against the US Dollar along with an overall resurgence in risk appetite since putting in a double bottom in early March. Prices now look to have established a medium-term top, putting in a Dark Cloud Cover bearish reversal candlestick formation and following through with a close below support at the lower boundary of a rising channel that has guided price action higher since late April.

We will enter short from here, initially targeting the previous swing bottom below 1.30. Importantly, this will be a “soft” target, meaning we will look for this to be the next important juncture but refrain from setting a firm take-profit order at this level, looking for the pair to sink substantially lower to break below the double bottom at 1.2454. A stop-loss will be activated on a daily close above the 06/03/09 wick high at 1.4340 (Ilya Spivak, currency analyst).

Malaysia's Steel Industry

PETALING JAYA: The outlook for the domestic steel sector should be brighter going forward as the slump in the industry has bottomed out following losses of about RM485.9mil in the first quarter and even more in the fourth quarter of last year, analysts said.

The worst is clearly over for the steel industry and earnings are expected to stage a strong turnaround in the third quarter of this year, according to AmResearch senior analyst Mak Hoy Ken.
Most steel mills continued to be in the red in the quarter ended March 31, 2009.
However, Mak noted that the quantum of losses for players such as Ann Joo Resources Bhd, Perwaja Holdings Bhd and Southern Steel Bhd had been reduced substantially in the absence of further write-downs in the value of their inventories.

Prices of long steel products (used for construction works) rebounded by 25% to RM2,000 per tonne currently from a low of RM1,600 per tonne in April.
It peaked at RM4,000 per tonne in mid-2008.
Credit Suisse said in a note on Wednesday that steel prices would be on the uptrend as a result of the Government’s pump-priming initiatives.

RCE Capital, Leaders Universal

RCE Cap declared dividend of 1 sen. Based on record, dividend yield is 2 %. So 'fair price' is 1/ 0.02 = 50 sen. Current price of 60 sen is pricey.
Other info: Net profit = RM66m y/y up 32%. Shares issued = 710m. therefore EPS = 66/710 = 9 sen. Current price/ eps = 60/9 = 7. NA = 32 sen

Leaders Universal interim dvd = 1.5 sen. ex 12/6, pay 26/6. Net asset = RM1.14
Net year profit = 86m. Shares issued = 436m. EPS = 14 sen.
Current price = 72 sen. PE = 72/14 = 5.
Assuming two dvd per year, 'fair price' = 2 x 1.5 sen / 0.04 record yield = 75 sen.
Buy at 70 - 72 sen range.

Commodity Index Stalled

CRB Index stalled at 260. Crude hold at 68. Gold hold at 981. Dollar index DX at 79.
Is this the end of the commodity rally..? And end of rally for emerging markets..? Will funds exit emerging markets and flow back to US..? And US dollar regain its strength..?

Major currencies also plunges against the US dollar today.
USD up against Yen and Swiss dollar.

Commodity Index CRB Rises

CRB Index at 260. Crude at 68. Gold at 977. US dollar index DX at 79