Since I can't buy Keppel Corp (too expensive), I am keen on buying some underlying warrants on KepCorp.
Stock price is WAY above all moving averages, a very bullish sign
Stock price has been on an uptrend since 25/08/2010
Volatility, as seen on the bollinger band range, is low, making the warrants cheaper
HOWEVER, prices are above the middle band for quite awhile already, indicating overbought territory/little upside.
PSAR indicates bullish trend
MACD is somewhat bullish...Both signal lines and MACD line is above 0, however signal line is above MACD Line
No trend in RSI, whether overbought/sold
Stochastic basically shows the same thing as MACD
KepCorp is currently consolidating and the TA indicators are only somewhat bullish (MACD/Stochastic/MA bullish trend, Bollinger, RSI neither bullish nor bearish, PSAR bullish). I will KIV this counter. If KepCorp can break out of it's $11.00 resistance at high volume, it would be a good time to get a warrant on it. However if it drops below $10.75 support then it'll be time to stay out.
But since the TA indicators are somewhat bullish, maybe I should take a punt on KepCorp...
Anyway, for Kep Corp some of the warrants I'm eyeing are:
1.) Something medium term (3-6 months long)
2.) Must be in the money
KEPCORP DB ECW110221 (LT3W) ASK: 0.630
Exercise Price 9.10
| Expiry | 21 Feb 2011 | Break even price at Expiry | 10.99 |
| Last Trading Date | 14 Feb 2011 | Moneyness | 16.21% ITM |
| Time to maturity | 72 days | Intrinsic Value per Warrant | 0.593 |
And
KEPCORP DB ECW110530 (MN6W) ASK: 0.395
Exercise Price 10.10
| Expiry | 30 May 2011 | Break even price at Expiry | 11.285 |
| Last Trading Date | 23 May 2011 | Moneyness | 7.00% ITM |
| Time to maturity | 170 days | Intrinsic Value per Warrant | 0.260 |
The former looks good as the ask price is close to the intrinsic value and Delta is 0.87, however, it's spread is 1 cent while the latter's spread is 0.5cents.
Shall track KepCorp and these 2 warrants.
Hi, I don't really find Kepcorp that bullish, but there could be a final breakout. I would wait for further price action..
ReplyDelete1)Prices way above moving averages isn't a sign of bullishness to me. It simply means that the stock is relatively overbought. Take a look at 26 Apr. Price was way above 20MA and 50MA, but see what followed. Only 20MA crossing above 50MA is possible bullish sign to me.
2)Negative MACD and RSI Divergence. Price remained about the same but MACD and RSI drifted lower. Something to be wary about
3)Strong resistance at 11.06- might not be broken so soon
Hi Hubert
ReplyDeleteThanks for your input. I appreciate it, as I'm still learning about TA. I didn't know about the negative MACD and RSI thing. thanks!