In downtrend, price is never too Low
Friday, February 25, 2011
Investors have gotten wildly bullish of late, as the bull market that started in early 2009 keeps driving stocks to new highs.
But the pigs are about to get slaughtered, says Bob Prechter, president of Elliott Wave International and editor of the Elliott Wave Theorist.
Prechter still thinks the new bull market is just a cyclical "retracement" of some of the bear market losses that we've had since the market crashed in 2008. Prechter expected this retracement to drive stocks 50% above the market lows, but stocks have since soared 30% higher than than he expected.
So when the day of reckoning comes, Prechter thinks, it will be even more startling. And Prechter still thinks that stocks will eventually crash to new bear-market lows (read: below 6,800 on the DOW).
What makes Prechter think this day of reckoning may come sooner rather than later?
Sentiment indicators and other technical analysis.
Investor bullishness has now gotten so extreme, Prechter says, that it has exceeded the levels in 2008 before the market crashed. Investors could still get even more bullish, of course, but eventually they'll pay for this optimism.
And Prechter's not just bearish on stocks: He thinks oil, silver, and other commodities are absurdly overvalued, too. The only thing he's bullish on is the dollar.
When will that be?
Wednesday, February 23, 2011
Deep-water oil wells generally require bigger support vessels with more brake horse power (bhp), such as those owned by Petra Perdana.
Petra Perdana has a mixed fleet of 25 vessels, of which 14 are larger vessels above 9,000bhp, which would make them ideal for Petronas’ new oil finds in Sarawak.
Tuesday, February 22, 2011
Target Price Y2011 : S$2.50
Saturday, February 19, 2011
NEW YORK: Investors are worried the U.S. stock market has rallied for six months without significant correction but they're not ready to call it quits, according to a Reuters report on Friday, Feb 18.
The CBOE Volatility Index VIX, Wall Street's so-called "fear gauge", was on track to end the week about 5 percent higher even as the S&P 500 index rose to twice its value from just two years ago. The index is usually inversely correlated to the S&P and a rise in the VIX typically means a drop in the stock market.
"There is definitely high anxiety because everyday it looks like the market is at the top and it's going to have to correct," said James Dailey, portfolio manger of TEAM Asset Strategy Funds in Harrisburg, Pennsylvania.
"Are we due for a pullback? Yes. When? that's the big question. Money just keeps flowing into equities."
The VIX's overall level of 16.51 is still historically low but substantially higher than recent volatility. That suggests investors see more share gyrations in the weeks ahead.
"The 3-5 percent correction that the market had anticipated might now turn into a 5-10 percent one."
Sunday, February 13, 2011
Troubled oil company Delta Petroleum (Nasdaq: DPTR) is now walking the proverbial tightrope after it recently began trading on Nasdaq’s Capital Market rather than the exchange’s Global Market. The company’s recent relisting at the hands of Nasdaq means that shareholders in Delta may be witnessing just the first of several punitive actions against the company. Like its name, Delta is at a clear crossroads.
In English, please
Nasdaq’s relisting means that the company’s outstanding shares have been transferred from the big swimming pool with the slides and diving boards down to the baby pool, where swimmers need to have water-wings and their mother’s undivided attention in order to dip their toes in. This is a bad thing.
As of Feb. 1, the company received an additional 180 days from Nasdaq to regain compliance in order to requalify for play in the deep end. In the short term, this is a good thing of course. But, ultimately, one can’t argue this is anything other than yet another major set-back for the company.
Those are the rules
According to Nasdaq listing rules, the minimum price of a company’s common stock cannot be less than $1.00 per share for 30 consecutive business days. Delta’s shares are currently trading at $0.74. Of course, it wouldn’t take much for a volatile company like this one to muster a rally (especially considering the extremely volatile nature of energy prices), but for the time being, the company will have to operate per normal under the looming threat of a complete de-listing. This is something that should concern investors.
Delta’s underperformance is certainly not a recent phenomenon, either. Share prices have steadily declined from $4.67 in February 2009 to its current status well below a dollar.
A last-ditch effort
Delta had hoped to catalyze a turnaround after selling some of its working assets and being aided by a simultaneous increase in gas prices, but bad days didn’t end there. Hitting dry wells and surviving on cash tapped through the equity markets is no way to run an oil company. No doubt, they have put in a lot of effort to delve into unproven areas, but that strategy clearly continues to backfire. Without a proper asset base from which they can generate revenue, it wouldn’t make sense to keep digging with investors’ hard-earned money.
Of course, Delta had its days under the sun, and it would be nice to see a turnaround. There have been other reasonably similar success stories like Talisman Energy (NYSE: TLM), but it would be wise to take a closer look at the underlying business fundamentals of companies like Delta that are riding on such a volatile lifeline. Leaving everything to fate sounds pretty un-Foolish, especially in this sink-or-swim sector.
Wednesday, February 9, 2011
Tuesday, February 8, 2011
In a widely expected move, the People's Bank of China announced Tuesday on its website that the benchmark 1-year deposit rate would rise by a quarter percentage point to 3 percent and the 1-year lending rate would increase by the same amount to 6.06 percent.
"The announcement may cause jitters about the impact tightening will have on Chinese growth but these should not be overplayed," said Mark Williams, senior China economist at Capital Economics. "The latest increases are in line with the gradual policy tightening that has been underway over the last few months and will not do much to slow growth."
Wednesday, February 2, 2011
Tuesday, February 1, 2011
The transfer of Delta's common stock to the NASDAQ Capital Market from The NASDAQ Global Market should not have any effect on a shareholder's ability to buy or sell its shares of Delta.
In transferring to the Capital Market, it is expected that Delta will have an additional 180 days to regain compliance with NASDAQ's requirement that its minimum bid price be at least $1.00.