Want Want off the ground!!!

Want Want closes above $3.13 for the first time to clear all previous high. There is nothing to stop the share price from shooting up now. Even if the Dow falls a little then Want Want will continue to go up.

I never believe analyst report because its estimates appear to be based on earning and company detail when clearly they write their reports after seeing good technical price movement from chart.

But anyway, UBS says Want Want is a leader in the China food sector. 2007 to 2010 earning growth is estimate to be 27.4%. Its 2007 earning growth is 20.8% when the sector is between 5.2% to 12.7%. Target price $3.60.

BTW the current PE is 29.63. In my previous article I have the wrong PE. So please disregard that. The current PE is modest and not too low either. Therefore the share price will not double within a couple of months.

Want Want China 151.HK begin to explode

This article continues from my article on Want Want. In my previous article I talk about immenent rise of the stock price once it closes above the $3.00 IPO listing price. Today the closing price is $3.07.

The stock price will surge very soon. There is one small resistance at $3.11 which is the tail previous spike. Once that is clear also then Want Want is clear to go.

It is worth mentioning that the overall stock market in the World and in China is at the start of another bullish trend. Want Want manages to close above $3 because of the overall environment. Please read my article on Stock Market Bottom Out, Confirming Market Bottom with Volume, Bernanke stops rate cut to support the dollar, Bank of England do not want further dollar slide, China reduce stamp duty from 0.3% to 0.1%.

China reduce stamp duty from 0.3% to 0.1%

China to reduce the stock trading stamp duty 0.3% to 0.1% starting tomorrow.

The last time China change the stamp duty was May last year. It was an effort to cool down the over heat stock market. The effect was not felt until November.

This increase is an phycological impact to the stock market. Under normal circumstance its effect is minimal. However because of its timing with the market bottoming (please see my other articles) the effect will be visible much sooner.

The second half of 2008 will be strong if the U.S. effort to lift the dollar succeed.

Bank of England do not want further dollar slide

Bank of England say they don’t want futher dollar slide.

The pound has been overvalued for too long from the point of view of the economy’s competitiveness vis-à-vis the eurozone. Indeed, the Bank of England welcomes this contribution towards the ‘rebalancing’ of our economy, from a position where we were (collectively) living beyond our means, and recent business surveys reflect the relief of British industry.

A weak dollar is affecting the whole world. The U.S and Europe has finally come together to stop the dollar from sliding.

For the past few weeks, the market appear to know about this, ignore the bad bank earnings. They expect the dollar to stop rising and the U.S economy to rebounce as THEY force the dollar up.

However with the current deficit, why this work?

Bernanke stops rate cut to support the dollar

Now we are clear why the market bottoms. The U.S realise they need a strong dollar in order to attract money back into the country and to support the economy. This month is going to be the last time Bernanke is cutting rate. 

With the rate cut stops, the dollar rebounce, the stock market rebounce. The stock market leads the fx market in this case.