2 months before 2019 ends, I pray the person reading this be blessed with good intelligence and good business sense.

I have written and posted more articles on Dayang than any other stocks before. My intention is to help investors to make more money from the stock market. I do not need readers to buy to support the share price because the daily volume is usually more than 10 million shares and whether you buy or sell will not make any difference to the share price.

Why price correction?

As I said many a time before, no stock can continue to go up or drop for whatever reason. After some time, it must change its trend. In the case of Dayang, it has been going up in the last 4 months from 90 sen to peak at Rm 2.13. The price chart below shows that there were several price corrections and most of them are quite small which show that investors without foresight are selling and smart investors who can see the good profit growth prospect, are buying every day. They expect to see better profit in the 3^rd quarter which should be announced before the end of this month November.          

Petronas will not stop pumping oil

Even if the petroleum price dropped by another 50%, Petronas will still continue pumping oil because the cost for just pumping is very small. Petronas has already paid billions of Ringgit for the construction of oil rigs or oil platforms. It is still very profitable to just pay for pumping and selling the oil.  

If you google you can see that the average cost for an off shore oil rig is US$ 600 million which is like a city and they all need maintenance and repair.

Dayang is the largest maintenance contractor in this region where Petronas has discovered a total of 163 oil fields and 216 gas fields.   

Dayang’s competitors are Carimin, Uzma and Petra Energy which are relatively small. That is why Petronas always award more maintenance contracts to Dayang. 

As long as Petronas continues to pump oil, Dayang will have more oil rigs maintenance contracts and its share price will continue to go up higher and higher. 

A good lesson for investors

Dayang has gone up more than 100% within 4 months. During this period, all those who have sold their holdings should realise their mistake and those who did not sell or bought more shares are really smart investors.

Ordinary mediocre investors

Most ordinary investors would be tempted to sell when the price has gone up 20 or 30 % within a short period. They do not look at the company’s business and its good profit growth prospect. They do not have a good track record. In fact, studies have shown that most day traders lose money.

Chartists who cannot believe their eyes

As the price was shooting up so fast, even those so-called experts in technical and financial, sold all their holdings. Although the price chart is bullish, they are so fearful that the price may soon drop. But the price continues to go up higher and higher and the chart is showing super bullish up trend. They cannot believe what they see. They are now in a dilemma whether to buy back at higher prices or not.   

Smart investors

All smart investors are intelligent. They have some knowledge of business and the ability to control their emotion of fear. They are willing to take calculated risk and they dare to use margin finance to buy more shares.