It actually rebounded after lunch. This is a nice surprise - now there's a 7 sen buffer to the 1.65 buying price:-)

But as I had written earlier, I'm not too concerned about today's price - up or down. Nor tomorrow, and the coming days. It may go down to 1.50, it may not. Doesn't matter too much, especially right now. I wouldn't need to be checking on the price every 30 minutes (or sooner, as with some people). This is for the longer term, not over a contra period.

At 1.65... I'm going to put my money where my mouth is and use one-third of the capital I had intended for Malakoff. Yes, there's always the possibility it might go lower, and there are also worries about the very real possibility it might be forced into "national service" and take over some of 1MDB's assets.

We can argue and speculate until all the cows come home about "its real value", "timing" etc. But this is how I look at it - a profit-making IPP controlled by a powerful and influential businessman is something I'd want in my portfolio.

We have seen it before - of IPOs that sputter initially but would later go up substantially in less than a year. It's the same pessimistic atmosphere, of many calling and dismissing these these counters as `useless'. The more recent ones (relatively): SKPetro - reference price of 2.30 upon Sapura and Kencana merger, and went down to almost 1.90. But what happened after that when all the weak holders had sold out? IHH... GasMalaysia... Astro, to an extent - if one had bought during the depths of pessimism when it was 2.60 or so, he'd have made reasonable profits. Not as outstanding as SKPetro, but good enough.

Yup, I may be seeing Malakoff at 1.50 but that's how things go when it comes to the stockmarket. I'm looking at a longer timeframe, of 12 months from now, when things have settled down. It may still be at a loss, or I may be laughing. Who knows? But one thing is sure - buying at 1.65 is definitely better than the IPO of 1.80 :-)

Ex. Price: RM1.20
Ratio 1:1
Expiry: 15/1/2016
Now selling at 0.085.
This looks like a reasonable punt.

Aiyoo!! What the heck is happening??
This is the counter that I liked the most. Well, serves me right, and a valuable lesson here - never, ever fall in love with a counter. Any counter. The warnings from the technical readings were there but I chose to just ignore these. Huge, basic mistake.

Good company but not so for investors and traders. One of the biggest disappointments for me, along with Mudajaya. Wah Seong essentially missed the oil & gas bull run from 2013 to mid-2014, maximising at just slightly over 2.00 when most other counters added 100% or more. But when the O&G counters started sliding, it also followed!

A few may have caught the bottom and will make some profit. A bigger one if this continues. But this may just be the much talked about technical rebound from a grossly and massively oversold situation. I'm going to see how it goes over the coming week or so first. It's okay to buy a counter at a more expensive price, but only if it has really found the bottom and consolidating.

For everyone's sake - especially those with positions - I'm hoping the steep decline over the past weeks is over. But the technical charts need to show an improvement first. Right now, they are broken. I believe the downside risk of sudden, big drops is minimal considering how much this and other O&G counters have come down to. The panic seems to be over. The weak holders and most of those who want to sell are already gone. And how many would really be getting any profits selling at this price? So, those remaining are mostly the stronger holders. But must also consider that we don't know what the various institutions - especially foreign ones - intend to do, what their strategies and plans are.

Good luck to those on a "ride the rebound" strategy. I honestly mean it. As for me, I'm still on "Wait and see" mode.

This is interesting and worth looking deeper into. THH, as with the O&G and other counters, had suffered selling pressure when the market opened. Went down to 0.275... BUT later managed to claw back the losses to finish unchanged.

Still too early, but does that indicate the sellers have already left and the ones remaining having staying power? If it stays at around this level, that might mean the bottom has been reached, and THH is forming a new base. Worth observing over the coming trading sessions.

Crude oil rebound...? I've just checked on Bloomberg that West Texas Intermediate is $58.18 (-2.95%). Brent at 62.14 (-2.42%). Quite heavy falls here although they might rebound a bit when the market closes.

Europe's stock markets suffered big falls too. Some of more than 2%. US is down too although not as bad. By the way, over the past months, the US stock markets (Dow and Nasdaq) tend to rebound in the afternoon. Apparently, the investors/speculators are generally still bullish despite everything, and would often buy on dips. Let's see how they close.

Anyway, concerning US interest rates: it is widely believed that these will be increased (and one of the reasons for foreign investors pulling out of stock markets). But even this isn't a sure thing. Fund manager Bill Gross (formerly of Pimco) and some others believe the Federal Reserve "may become dovish", i.e. not increase interest rates because of the crude oil plunge (and thereby further upsetting the markets).

This is the point I'm trying to make - no one really knows. Interest rates, stock markets, crude oil etc. ... we will find opposite opinions to everything when we try to refer to `the experts'. In the final analysis, it is WE as individuals who will have to make the decisions ourselves... because it is we who will either profit or bear the consequences of suffering losses. It's very tough to make profits consistently, that's for sure.

A bit off-topic: If one strongly feels that crude oil will decline further, there's a way to profit from this - the Futures market. Nowadays it is no longer difficult to be involved. Most of the local investment banks provide a platform to trade.

This is something which I've never involved myself in but am giving serious thought to. It's not just to short crude oil, but also to go long. It will find a bottom, that's for sure. The question is whether crude oil will languish at around that level, whatever it may be, OR will it then retrace its fall and start to climb back up? There's money to be made (and lost if we bet the wrong direction, of course).

But my belief is this: there will always be demand for crude oil, and unless if there is a worldwide depression, the demand will grow. It certainly doesn't look like it at the moment or the near future. But try to project two years into the future (by looking at the past) - is it totally impossible for crude oil to climb back towards US$100 during the next 2 years? I don't think so. If it does, I'd like to find ways to try benefit and profit.

@Firebird2, I've had some experience with the market but my involvement is on-off. Not continuous. But I try to learn from others, including at this very important forum, of course. There are many knowledgeable and experienced people here. When they say something, I'd place great importance to their opinions. Doesn't mean that I will follow, but I will definitely seriously consider.

There are always opportunities - it's just that one often has to wait. Just remember not to be rash and emotional, and TRY to do away with various bias and prejudices if one wants to (1) protect his capital (2) make profits. I'll admit I have my own bias which had prevented me from seizing opportunities. Or made wrong decisions.

As an example, for some reason, I don't like Malaysia Airport, Pos Malaysia, Takaful... among others. As a result, I didn't buy these when they went on an uptrend two years or so ago. Stupid, isn't it? Must always remember our purpose here - "to make profits". So what if we don't like the counter? If the probability of it going up is high, then buy... and make money. Another bias I had - I LOVE Mudajaya. This is the counter I absolutely love the most above ALL the other counters in BSKL. Well, when emotions get in the way, I refused to see it was on a downtrend. Serves me right.

@Firebird2, These painful lessons are the most valuable... provided we learn from them. For one thing, I've learned and now accept that "cheap" is relative. Had made mistakes buying counters that looked cheap (when compared to their highest)... and then seeing these getting cheaper!

The most important lesson from previous experiences - "The Trend" is everything. Doesn't matter how `expensive' a counter is - if it's obviously on an uptrend, then the possibility of making a profit is much higher. Same with something on a downtrend - it's futile to fight against this.

So this is my opinion on SKPetro and the O&G counters. I'd want to have them in my portfolio... but it must be after they have found their bottoms AND showing signs of an uptrend.

Averaging down is definitely a very good strategy. But there must be a method to this. From my own sometimes painful experiences, one must make sure the bottom has been reached first... that the counter is starting to reverse. Better yet - confirmed (as shown by TA) it is indeed reversing. Might have to pay more in the latter instance. But better this than to attempt to average down... and then seeing the recently purchased lots also declining. Sometimes, just watching and doing nothing (yet) is the best move despite this looking so passive.

Those gleefully looking for SKPetro and other counters to crash are definitely not aware of the consequences. Even if you don't have shares in these counters, or other counters in Bursa Malaysia. "The banks" - should there be turmoil in the financial markets, one of the textbook moves things that is likely to happen is Bank Negara raising interest rates. If you have loans, including and especially housing loans, that will spell very tough times. Guess what will happen to the price of properties when that happens.

When properties fall, and if one had used that as collateral for loans, the banks will demand that he top up the difference. Many will fail to do that and there will be foreclosure, leading to even more depressed prices. Be careful with what you wish for for it may materialise. The problem is - can we handle the unintended and unwanted consequences? It's like a package where we are forced to accept everything that comes with it, not being able to pick and choose.

@DeHouse 17:05 This comment makes sense. There's a time and moment for everything, and SKPetro isn't exempted.

"SKPetro will become penny stock..." as a few claim. Nothing is impossible, of course. But remember that's also what some people had gleefully declared during those few days after the Sapura-Kencana merger in early 2012. From the calculated merger price of 2.25 or so, it went down to 2.00... then below until about 1.92. "SKPetro will become penny stock..."

And what happened after that?

Those who saw value quietly bought and waited. And they were richly rewarded during the months that followed while the doomsayers watched in disbelief. And salivated.

There's turmoil in the O&G industry worldwide as a result of crude oil prices tumbling. But this isn't the first time such a thing had happened. Just look at the companies involved during the past few decades. The weaker ones had closed shop or were bought over by the stronger ones. And when the turmoil ended, these companies became even stronger.

Crude oil may be sliding but there's a limit as to how low it will go. Shale or whatever is secondary - the fact is that the world is dependent on fossil fuel and there will always be demand for crude oil. This commodity will find its level and support - the market will make sure of that. Looks gloomy for the O&G counters but I won't bet against a full services company SKPetro. Even with its debts (find one similar company without such debts in this capital and equipment-heavy industry).

The only problem now is to decide on WHEN to come in for now obviously isn't the best of times. As @DeHouse had written, things could well change in the next few months. This is a reasonable timeline. When O&G counters stabilise, create a new base and reverse the trend, I would want to be in. Definitely.

I'm putting aside things like TP etc. Crude oil price too. I think it's the right time to look at the technical charts and make buying decisions based on these. What's the bottom? Who really knows. All that we read and hear now are just opinions and guesses.

Until Muhibah finds a new base and consolidates, it's too risky to put in money right now. If we are lucky, it might rebound next week. If not... then we suffer until it finds a bottom wherever that might be. Protection of capital takes supreme priority in market turmoil like now. Much better to have unused cash at the sidelines while we wait for things to become clearer than to have `cheap' counters that get cheaper.

Worth reading today's short analysis by Macquarie Equities Research (MER). The reasons it gave for the TP of RM4.80 http://klse.i3investor.com/blogs/kltrader/66335.jsp

Many will laugh at this given the situation now, and the predicted turmoil concerning crude oil prices and the effects on the O&G industry. However, must keep in mind that SKPetro "the company" (not to be confused with "SKPetro share market price") will likely weather the turmoil. Its order book is solid - unlike so many other O&G companies, this is constantly being replenished.

At the same time, we must also place critical importance to "The Trend". It WILL check its slide, build a new price base and then go up again. But this is in the future. It's futile and foolish to go against the present market sentiments. In my opinion, at the very least, it must be above the 20-Day Moving Average. At the moment it isn't. The technical charts are broken and it's very risky to blindly jump in, hoping this is the bottom and that it will rebound very soon. Not impossible, of course, but this will be 100% guessing and shooting... not a prudent investing/speculating strategy.

There's an opportunity here. Apparently, some analysts/investors have lumped Muhibah into "Oil & Gas". Yes, it is indeed involved in quite a number of O&G projects... for O&G companies. Muhibah is more of "Construction".

This counter is worth following and investing in. But at the moment, it's futile and foolish to go against the market. Better to wait for the turmoil to end, and for Muhibah to build a new price base first rather than trying to guess on its bottom.

@ks55 Very wise opinion here. That part about not putting 100% of one's capital especially. We can't avoid from having to take risks if we want to invest/speculate in the stock market. However, protection of capital must always be considered and there must be a plan and strategy. If one wants to use FA, going for value investing, long term investing - stick to this. Same with TA. Must avoid impulsive and emotional buying.

Must admit it's very tough staying at the sidelines and just watching, not making use of the idle capital. My hands get itchy, wanting to buy a few O&G counters. Especially when you know how high they had been just a few months ago. Have to force myself to just watch for now despite the very attractive prices and the possibility of a technical rebound. That's why I just watch the counters and prices here, not through the online trading platform (so easy to make a few clicks and buy).

If one's strategy is to buy at this perceived low price and wait - well, that's also a good strategy. No one can say whether you are right or wrong. It's for the individual to create his own strategy and make the decisions. After all, *we* will suffer or gain from these, not anyone else. With me, I've decided upon "The Trend" so I must stick to this. Good luck to everyone, whatever your strategy and decisions may be.

@lim88 Thanks for the alert. Had thought the market maker was still putting it at a ridiculous 0.15.

Armada-CY at 0.05... I'd say this is reasonable enough. 29% premium with slightly more than a year left is acceptable. At 2:1 ratio, break even will be 1.37. That's 31 sens from the price right now. Gloomy sentiments right now but striking within one year is definitely not impossible.

This counter is really puzzling. While it's true that O&G companies are taking a big hit, Armada's decline to this level is surprising. Public Investment had written this evaluation last month: http://klse.i3investor.com/blogs/PublicInvest/64410.jsp

Seems that Armada/BAB is a significant WORLD player when it comes to FPSOs. Yes, the price of crude oil has been declining but the industry would still need these FPSOs. These are big-capital assets/equipment which take significant amount of time, money and effort to set up. It's not like some newcomer could decide to have a FPSO unit today and have it up and running next month. And Armada has existing contracts to keep itself busy.

But the market doesn't think so... and what the market thinks at any given time is the most important factor. HB is someone with vast experience but his resignation with "family problems" being cited, plus selling off his shares to meet margin calls, does raise questions, suspicions and speculations. Some may be false. But you can't blame people for speculating - this will happen when not enough information and explanation are given.

This counter is worth following. But must be reasonably sure the 1.00 support will hold first.

Thank you for your effort. Unlike many other markets, we lack informed opinions and analyses when it comes to BSKL. I've bookmarked this blog. Please continue posting, even if there may not be comments for every one. Most of the time, people simply don't know what to add. But they do read. Including me.

It's gloomy now but I believe there will be another positive chapter to THH. The last financial results were very disappointing, true. But its FPSO business is actually promising. Have to remember that Tabung Haji, Quek and Mara (had they already bought at 0.80??) are shareholders - they are in for the long-term.

Worth following the developments, especially the proposed rights and bonus. Must see what the pricing will be, and then evaluate. For the moment, due to the negative sentiments concerning the O&G sector, it may be prudent to just sit at the sidelines for the time being. But like you, I sense opportunities here too. Never mind things like CIMB's previous TP of 1.48 (and recently downgrading to 0.43. Way too late la), which create bitterness among some. I believe its time will come again, and I hope I'll be able to recognise the change in course and trend. We keep ourselves updated here ya?

Intends to buy Bsmart Comm for RM110 million. I've had a cursory look at this company and business (some sort of vehicle anti-theft/tracing system) and have the feeling of "grossly overpriced". I have doubts the authorities would approve some of the proposals, especially the valuations.

From a high of 2.12 on 9 July 2012 to becoming one of the cheapest counters in the world. There were surely manipulations going on with a syndicate/s pumping up the price, drawing in unwary retail speculators... and then leaving them to hold the bag. And what had the Securities Commission done about this - did they launch any sort of investigation and what was the outcome? NONE as far as I know. The SC seems to be limited to issuing UMAs... and that's it. Can't depend on it to protect investors or take meaningful action against perpetrators.

I wonder what kind of business Cybert is doing now? Its NTA is at *minus* 0.03.
Last quarter, revenue was a miserable RM14,000, registering a loss of RM570,000.

There's a proposed regularisation plan, which will involve capital reduction etc. Almost dead but at least there's some sort of plan. Market capitalisation is RM2 million. Guys, why not we pool our money and take over this company? Can see our names listed in Bursa announcements as "major shareholders" or "significant shareholders", at least :-)
http://www.bursamalaysia.com/market/listed-companies/company-announcements/1818285

@pirate99: Yup, long time. I went out too early and watched with a lot of jealousy the O&G counters going up. After that, I was also too quick to take profits in the telcos (Digi and TM). Had missed great opportunities to make serious profits. That's another lesson: Next time, must hold my nerves and let the winning counters run to the maximum instead of being too cautious and cashing in too early. But at least I didn't jump in when prices were at their peak.

Yet another compelling evidence that "trend" overrides everything else. If a counter and sector are in an obvious downtrend, the market won't see the fundamentals. SKPetro's most recent contract wins are noteworthy: "US$459m (RM1.6bn) worth of contracts" http://klse.i3investor.com/blogs/hwangdbs/66039.jsp ... Instead of going up, or at least consolidating and building a new base, it slips further.

Regardless of how good this company is and its future potentials, we must also acknowledge this critical factor of Trend. The price is presently testing the support - if it fails to finish at or above 2.50, the slide in price will likely continue. I'm so tempted to buy and keep because "the price looks so cheap". Forcing myself to stay away, keep the capital at the sidelines until a new base is confirmed. May have to buy at a more expensive price in that situation, but the chances of making a profit will be higher.

And so ends another chapter of TH Heavy aka Ramunia. I had bought into it during the time of the rights issue - bought the mother at 0.42 if I remember correctly and subscribed to the rights. My biggest regret - selling these shares WAY too early at 0.50. It then became one of the punters favourites, especially after Tan Sri Quek came on board and went up and up.

I should have re-entered when it entered those periods of weakness, which turned out to be temporary. But I didn't, and I'm angry with myself for missing the opportunities. What held me back was this: "It has already gone up". At least I had learned a very precious lesson: The price itself is secondary - it's the TREND that is everything. TH Heavy, as with the O&G counters, were on an uptrend. It doesn't matter what price they were at that time - just buy, especially during those temporary periods of weakness when they become a bit cheaper.

This lesson of "The Trend is Everything" - it also works the other way. When the technical charts started to indicate a downtrend (trading below 20, 50-day moving averages, among other things), that's the time to sell. And stay away although these counters appear to be a bargain. They only seem to be a bargain or `cheap' when you compare the price to its peak. Very tempting, but stay away. Remember "the trend"...

Sumatec and its WA and WB warrants: The mother is now at 0.225 while the warrants - both 1:1 conversions - are at 0.15. I was thinking, if one fancies Sumatec's prospects, why not just buy the mother which is just 7 sen more? No expiry dates with it and there's no need to convert to anything.

Or am I missing something here when it comes to the warrants - what's their attraction??

@Jester - Yeah, long time no see:-) No, it was me who way away. Had sold out most of my counters late last year... and then seeing them going up. As a sideline to my day job, was/am focusing on an agro-based project in Lurah Bilut, Bentong since then so I wasn't involved in share trading. But I must admit I missed the excitement and anticipation, although it's kind of fortunate I didn't have any positions when the O&G counters started to turn sour.

WOW! This is an excellent post of very high quality. I was doing some research on beaten down oil & gas counters and making a list of companies "with potential" to invest/speculate in. Sumatec is one of them. Your post here has helped A LOT towards my understanding. Thanks for your great effort. I will be reading your other posts too, that's for sure. It's very difficult to find quality analysis and posts concerning Bursa Malaysia but I'm encouraged after reading this.

By the way, the Corston-Smith Asset Management Managing Director in Malaysia is Datuk Shireen Muhiudeen who writes "Governance Matters" in StarBizWeek on Saturdays. For what it's worth, my wife was her classmate at BBGS in the 70s and she knows what type of person Datuk Shireen is. I'm very sure she had done a lot of research on Sumatec before approving the purchase for the client, whoever this may be.

And the involvement of people like Halim Saad and also Chua Ma Yu - they have the experience and credibility. This isn't a group of market manipulators out to hype and chase up a counter... and then selling off for huge profits after retail investors had piled in. I believe they are after genuine projects with potential. I'm going to put Sumatec at the top of my list regardless of the O&G turmoil, crude oil prices etc. The present low price presents an opportunity for those who have holding power.

Thanks again for this very informative post.

Talking of Pengerang, I'm thinking about Dialog and its Pengerang Independent Deepwater Terminal. Regardless of crude oil's price, there will always be need for docking and storage services. And Dialog has the facilities - a joint venture with Holland's Royal Vopak. There will be recurring income from this asset, i.e. "oil storage facilities". Dialog targets 30% of its income to come from this. Nice business because it doesn't matter even if crude goes down to US$30 - it still needs to be stored pending distribution.

@ks55 -->"Don't get too excited over price movement over a few months."
I agree with this statement, both ways when it comes to price - up OR down. I feel many are too concerned about DAILY crude oil price movements right now... not even "a few months":-)

Anyway, there might be something `good' about the price decline of O&G counters over the past couple of months or so. The projected crude oil price decline is mostly priced in already with these counters. Most of the weak holders have already sold so the risk of panic selling over the near future is considerably less.

But one of my main concerns is this: the big boys, i.e. local and foreign institutional investors. The latter especially. If they decide to cash in and put their money elsewhere, there will be another slide in price. For the moment, 2.50 seems to be strong support for SKPetro. Notice how it went to 2.48 earlier today... and buyers immediately appeared. Will have to see the data over the next few days. If the counter remains at around this level, that will mean a new base is being formed.

Did it go to that level in the late 90s, RM5.00? If I'm not wrong, the lowest was 4.20(?) Does anyone remember?

US dollar appreciation is not just against Ringgit but also the other currencies. Now at 7-year high versus Yen. There are both positive and negative impacts from "ringgit's fall" (if one wants to see it this way, as opposed to "dollar's rise"). Obviously, imports priced in dollar will be more expensive. But if one is an exporter selling in dollars, he will be very pleased. In Malaysia's case, this isn't quite like the late 90s. During that period, we had been suffering trade deficits most of the time. But since then, we have been registering surplus. But borrowers will face problems with their dollar-denominated loans - government AND private sector.

As for crude oil, the best that we can do now is to speculate. And that includes with the so-called `experts' and `analysts'. Even this "Saudi versus Fracking" has different versions. Some say the Saudis are trying to drive down the US shale oil industry. Yet others say it's tacit agreement with the US government to do in Russia. Who really knows? But what I'm very sure is this - crude oil, regardless of conventional or shale, will ALWAYS have a demand. Therefore, there will always be demand for both upstream and downstream products and services. The prices can only go down to a certain level. Trust a free and unmanipulated market to find the right level, wherever that may be.

The best that we can do is to be aware of developments and be nimble and quick to adjust to the changing situations. There are also opportunities from the current uncertainties and turmoil.

That might be a good strategy, especially if one has unused capital at the sidelines and willing/able to wait for the trend to change. There's always the risk of it sliding further, of course, but I feel the threat of big losses is limited given its current level. Remember that SKPetro was at 1.95 once, which is lower than the Sapura-Kencana merger conversion price of 2.20-2.30. It had also felt gloomy at that time. But those who had bought at the low 2.00 levels later made huge profits. The key strategy is having the stamina to wait regardless of the daily/weekly movements.

A cheap way to bet on SKPetro is through its structured warrants (SW). "Cheap" is comparatively, of course, as per the mother. It will be tough to strike with most of its SWs, especially those with ex. price of more than 4.00. But a few look realistic:
-C5: 3.48, 28/10/14 (But ratio is high at 6:1)
-C7: 3.18, 30/11/14, 3:1
-C8: 3.20, 1/7/15

If there are signs of SKPetro changing course, I'm going to risk it with C7.

Despite the current gloom, pessimism and negativity, SKPetro's time will come again. This will depend on a few critical factors, including the price of crude oil, of course. Most analysts think there is some way to go before the bottom for crude oil is reached. As a result, there is uncertainty, which has spread to oil & gas counters including SKPetro.

Having acknowledged the crude oil priced factor, I'm more concerned about seeing SKPetro (and the popular O&G counters) consolidating and forming a base first. 2.50 seems to be strong support for now and it's indeed tempting to see this as "the bottom". But nobody is sure about this. Early to end November - the price of SKPetro "looked to have reached the bottom and consolidating... RM3.00 looked to be strong support". But it then dropped sharply to the present level. So, we have to be cautious here and not be too quick to conclude the counter has already stabilised just because of a few days of "Okay performance". If it slips below 2.50, then we may be looking at a new low level of around 2.10. The much dreaded "Cheap becomes cheaper" will continue.

There might be some sort of a technical rebound very soon due to this counter having dropped so much and being in grossly oversold territory. Those who buy at this price might likely make some profit from this technical rebound. But how strong would this rebound be, and will it hold? My concern is this: trying to catch the bottom "to maximise potential profits" might turn out to be "Catching a falling knife".

The technical charts are broken (check at ChartNexus.com) - SKPetro is way off its 20-, 50- and 200-day Moving Average. It's very tempting to "buy a bit" at this level in the hope of a rebound but it may be more prudent to wait until it's at or above the 20-day Moving Average first... at least.

If one strongly feels SKPetro is going to go down even further, there's an opportunity to do something about it: its put option:
SKPetro-HB; Ex. Price: 2.68; Ratio 3:1; Expiry: 30/11/15.
Current price is at 0.22

The main strengths: 1) Almost one year until expiry 2) The mother, at 2.51 is now lower than the ex. price
But you will be paying a rather high premium: 0.22 x 3 (Ratio) = 0.66. To break even (not including costs), SKPetro will have to come down to 2.02. Not impossible, but not very attractive odds to make money.

@GoldenShares @longterminvest and all - Thank you for your kind words. I'm glad a few find my comments of some use. In groups like this, the sharing of EXPERIENCES is extremely valuable. A lot of lessons can be learnt if we are honest and sincere, and willing to see things with an open mind. The market can often be very hard and cruel but there are always opportunities. All of us have had our share of success and failure in the stock market. We need to analyse these so that successes are repeated more often and consistently while failures should be valuable lessons in avoiding future losses. Or, in instances where this is not possible, then to minimise our losses and thereby live to fight another day.

When it comes to oil & gas counter at Bursa Malaysia, I'd say SKPetro qualifies as "Best of Breed". But no matter how good and with potential this company is, it certainly isn't immune to panic and selldowns, as shown over the past few months.

For us the ikan bilis, the strategy should be "tumpang semangkuk" - if it's on an uptrend, as was the case a couple of months after the Sapura-Kencana merger from mid-2012 right until last July, that's when we come in and trade and trade. And get out when the trend indicates a reverse.

I will definitely favour SKPetro and am always looking for an opportunity with it. "Looks like" strong support at the 2.50 level. But I'm going to wait a bit to see more evidence that it is indeed solid support. Many investors are still spooked by the recent meltdown, including foreigners. We need them to help move a huge counter like this. Looks "cheap" at the moment but I'm willing to wait and buy at a more expensive price... when the technical readings are more encouraging. There could be many investors who are waiting for the price to go up a bit to sell (plus the bottom feeders who bought recently). RM3.00 will be very strong resistance. If SKPetro convincingly clears this, I'm in.

We can also look at it this way: we don't know what the bottom is, but by any reckoning, buying at 2.56 is much better than 4.56. That was SKPetro's price a year ago. If one had bought at that level, it does make sense to average down. Based on previous lessons, every dog has its day and one day these O&G counters will be in the limelight again. But one will need to have the stamina to wait. And then wait some more.

Another aspect to be very wary of - something I've done again and again... trying to catch "the bottom". Makes a lot of sense: "Buy at the lowest point, then sell at a big profit when it goes up." Great theory. But there's one very big problem - we don't know where the bottom really is. This one can be very painful too. We think it's already low - "surely, cannot get cheaper!" But they do.

And it's even more painful when we see other counters going up and up... especially those we had refused to buy earlier because "they have already gone up...expensive already." The technical readings are very important. No guarantee, but at least our chances are better than to go with `gut feeling'. Unfortunately, I have yet to find a local technical analyst who has consistently read the charts right. This takes a lot of skill.

@GoldenShares, I've gotten burnt too many times getting into counters based on `research' by various analysts. Not that they were always wrong for some of their analyses did `make sense'. But they tend to be like reporters - writing after the fact, i.e. after something had already happened. Now every analyst keeps harping on "crude oil declining". Jeez, even the man-on-the-street knows this. It would have been more useful had these analysts recognised the trend and made this call a few MONTHS ago (actually one foreign technical analyst did, and people would have made a lot of money betting against crude oil. Or at least avoid adding to his O&G portfolio. Greg Guenther of RudeAwakening, DailyReckoning.com).

I've realised this about the stock market and counters - "the trend" is everything. `Good' or `bad' counter/company is secondary - nowhere near as important as the trend. Makes a lot of sense. Unfortunately, all of us tend to be biased and prejudiced - we would stick to favourites even when the trend is unfavourable. And ignore those on an uptrend... just because we don't like the company or industry. I've been guilt of this so many times (for instance, had refused to buy Malaysia Airports last year. and Takaful a year before because... I didn't like these companies. That was so dumb!)

Anyway, I'm trying very hard not to let emotions put capital at risk. I LOVE these O&G counters, and they certainly look `cheap' now. Good bargain, right? Yes, but only when compared to "previous highs". We should be more concerned about protecting out capital, first and foremost. Then, "increasing probability" of making profits. It's not guaranteed but I believe going with the trend - going with whatever are "the winners"/ "the favourites" / "the darlings" of the month/quarter - gives us better chances in the market.

This is probably one of the best counters to invest in when it comes to "Oil & Gas". Can't see too many faults with it:
(1) It may not be "the biggest" but it's certainly a Malaysian company that is visible and noted in the O&G industry.
(2) Huge order book should see it through the current turmoil. Unless if the contracts are cancelled.
(3) The government will surely favour and protect SKPetro.

This is the kind of company which we the ikan bilis should `tumpang' for the ride.

BUT we must also consider "the trend". O&G aren't exactly being favoured by investors and fund managers at the moment, and it may be painful to go against this trend just because SKPetro is a good company. We have seen this happen again and again: "Low" becomes "Lower".

Let them bottom out and build a new base first. Based on experience, it's much better to only start buying when a counter/sector is showing signs of an uptrend instead of being too early... and suffering while it finds its bottom and new base.

jester, that's a wise thing to do - monitor and observe counters, and hopefully learn something from its coming movements. Make an opinion of how it might go based on fundamentals, charts etc. and see how it really goes. Won't make or lose any real money from doing this, of course. But the more important thing is in the self-education and experience gained which will be very useful in future trades which involve real money.

I've also learned something last month; from monitoring Digi. Based on the charts, had felt confident it had strong support at the 2.60 level (had held a few times), downside risk was limited and it might be worth buying and waiting for although I didn't expect it to suddenly go up so soon. The lesson for me is this: if I can afford to wait, buying counters at proven support levels wouldn't be a bad idea. (In Sendai's case, I don't know what this level is)

If one really doesn't have any other counter to speculate on, might be worth taking a risk with. It has gone down so much and the downside risk is probably very limited. The only concern is that a major shareholder might suddenly unload his shares on the open market (an indication he knows something negative is coming). Based on previous performance, Sendai is known to suddenly come to life and giving the bold speculator an attractive-enough profit margin.

@zero Yeah, the Ukraine issue is bad news for airline companies due to the fuel price factor. If they didn't hedge their prices, the rise will cut very deep. The current quarter doesn't offer much promise to AAX. That's part of the fundamentals. This is compounded by the technical charts which doesn't show a solid support level yet. Wait-and-see appears to be the better option here - wait for something positive to appear first rather than try to catch the bottom.

It has slipped below the 0.50 support level. Quite a significant fall over a week. There might be more purging of weak holders to come. Promising counter but will need to see it form a base first.

Today external events are affecting KLSE, including AA. Ukraine - specifically Russia's likely intervention and the US' and Europe's response - has served to dampen sentiments. Unfortunate for AA since it affects last week's momentum. Will have to watch how this event progresses. If it becomes worse, might be better for us to trim our portfolio. At the same time, it will also provide opportunities.

I agree with the essence of what @BursaBullTrader and @CityTrader wrote. (eh, why your comment kena flag?! Or maybe someone thought the icon is like Facebook's "Like"? Haha!) Although I do look up what business the company is in, EPS etc. the most critical factor is the cycle. Or trend. Buy a super-duper great company when it's on a downtrend and the consequence will be months and years of waiting just to break even. While it's true that we don't know the future, technical analysis does help a lot in improving our chances of making a profit. Plus avoiding/minimisng losses. I like how CityTrader and BursaBullTrader approach it when it comes to the stockmarket. Thanks for sharing.