Stock Call: Buy Hyflux (600) at $3.36 and below!

Recommend a buy on Hyflux at the price of $3.36 and below.

On Fri, Hyflux managed to hold at the support level of $3.38 though the sell off VOL is high at 2.1 million (Twice Ave VOL). I strongly believe that Hyflux will be able to hold around this level and do a consolidation phrase before going for another outburst to test the important technical resistance at $3.66.

Technical Data

RSI: Oversold

Bollinger: Going though consolidation or “bollinger squeeze” phrase

Resistance: $3.66

Immediate Support: $3.38

Major Support: $3.30

Fundamental Data

PE: 23.8

EPS: $0.142

Yield: 1.5

Price to book: 4.89

MY TACTIC: Buy at $3.36 and below. Cut loss if CLOSE below $3.30 at HIGH VOL.

Dow Jones news on 24 Mar

Hyflux (600.SG) in choppy trade, flat at S$3.41 vs. intraday high of S$3.44, low of S$3.40. Stock hasn't made much headway since reaching current March high of S$3.58 two weeks ago, when water treatment firm announced win of S$43.8 million contract to build initial stage of seawater desalination plant in Singapore. News flow since then has been slow, with only one announcement of a director trimming his stake via sale in open market. JPMorgan, which has Overweight call with S$4.20 target, says Hyflux's prospects in Singapore underappreciated by investors. Notes with Singapore's 1961 water agreement with Malaysia expiring next year, Singapore government likely to award desalination projects in run-up to 2011. Says Hyflux potential beneficiary, given its involvement in developing city-state's first desalination plant in 2005; tips potential contract value of S$300 million. Orderbook quotes suggest stock likely to hold around current levels.