Wednesday, August 25, 2010

SGX : Neptune Orient Lines (NOL)

Neptune Orient Lines Ltd (NOL)
The latest operational update on 16 August 2010 showed that NOL container shipping volume (FEU) for Period 7 (26 June 2010 - 23 July 2010) increased 18% comparing to same period in 2009. There is actually a decrease in volume gap. The initial periods for 2010 had a larger shipping volume increase when compared to the initial periods of 2009. Perhaps this is a sign of economy growth slowing down. The Average Revenue Per FEU, however increased 39% y-o-y for Period 7 while YTD revenue per FEU increased only 15% y-o-y. This shows an improved core freight rates in the major trade lines.

I felt that NOL has been a lagger in this recovery and this counter has still got more upside potential then others (eg. property and bank counters).

Technical analysis shows that NOL has came down recently from $2.16 to the $1.90+ range. The short-term support level is around the $1.83 mark but there is also a chance on NOL having mild support around $1.87. This counter have not closed below $1.90 yet but I feel a good time to enter is probably when SGX market opens tomorrow.

Entry price : $1.83 - $1.87
Cut loss price : $1.75
Target price : Around $2.15 (will post when the time is nearer)
NOL did not hit entry price on 25/8/2010

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