Stock in Focus: SOUTHEAST ASIA CEMENT HOLDINGS, INC. (June 26, 2009)

BUSINESS PROFILE

SOUTHEAST ASIA CEMENT HOLDINGS, INC.

Southeast Asia Cement Holdings, Inc. (CMT) was established on May 3, 1994 as a cement holding company, and listed at the Philippine Stock Exchange on December 14, 1994. In December 2003, CMT subscribed to 1,548,614,753 common shares of Republic Cement Corporation. As payment for the said subscription, CMT exchanged its 19,960,995 common shares in FR Cement Corporation (FRCC) and 10,000,000 common shares in Lloyds Richfield Industrial Corporation (LRIC). As a result, FRCC and LRIC ceased to be subsidiaries of CMT. Accordingly, Republic became an associate investee of CMT.

On October 9, 2007, the Securities and Exchange Commission approved the merger of CMT's subsidiaries, Seacem Silos, Inc. (SSI) and Seacem Trading Corporation (STC), SSI's subsidiary, Agrodynamics Philippines, Inc., and STC's subsidiary, Hopkins Holdings, Inc., where SSI is the surviving corporation. SSI remains a wholly-owned subsidiary of CMT. SSI has not started commercial operations.

Source: SEC Form 17-A (2007)

Reference: http://www.pse.com.ph/

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Analysis:

Base on the 20 day DPO reading, CMT is -0.01 bearish. The Williams %R reading is -70.37 indicating a BUY signal since June 24, 2009. Upward trend strength is now 38.19 base on ADX reading. This slowdown in trend strength is mainly due to the fact that many traders have neglected the capability of this stock. Before the retracement, CMT has the strongest trend strength among the other stocks. Its strongest ADX reading of 76.30 occured last June 5, 2009 before the retracement occured. A proof that this stock was simply neglected can be seen after the big flash out of traders that occured June 17, 2009. Three consecutive horizontally alligned dojis occured and small volatility can be seen here onwards. The bollinger bands also can attest to this. According to the bollinger band readings, the price have been on this narrow range for 6 days already and the longer it stays on this range the greater is the probability of a significant price increase. What usually happens after a small volatility in stock is a large volatility, therefore this factor is a big plus to this stock.

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Support/Resistance:

Based on fibonnaci readings the current price is above the 38.2% fibonnaci retracement support line at 0.74. The price is also currently trending along the 50% fibonnaci fan support line. Then base on the fibonnaci time extension the price just reach the 38.2% line, so we expect a major change in price direction possibly upward by monday or tuesday.

Suggestion: BUY