May 23-26, TA for IndoAgri - Catching the "failling knife"

TA for IndoAgri,

Trend - Down trending (50D below 100D below 200D confirmation, MACD -ve range)
Momentum - Oversold
Price to Volume Trend - heavy sell down.
Volume - 9x, Panic Selling
Candlestick - 1 black soldier (falling knife)
Support - 1.58, 1.41

I share the news on IndoAgr that I extracted. It's like a "falling knife", in theory never catch a falling knife, as you will not know what is the support level. From the last classical support, it will be 1.41 and 1.58. This also co-aligned with the analysts report of 1.42. Note, it is a down trending stock. If you LONG it, you might see your stock value decreasing over time. So my advice, - just use TA to trade.

News Update,

147 GMT [Dow Jones] STOCK Call: CIMB downgrades Indofood Agri Resources (5JS.SG) to Underperform from Outperform and cuts its target price to S$1.94 from S$2.73, based on 12X forward P/E from 14.5X, to account for the shareholding dilution after the plantation company says its PT SIMP subsidiary will be listed at IDR1,100 per share share vs its IDR1060-IDR1700/share indicative price range. The house says it's negative on the news "as: 1) the offer price represents only 8X P/E; 2) earnings dilution is higher than expected; and 3) the implied value for IFAR is only S$1.42 or 30% below its current share price." It adds "we are disappointed with its plan to proceed with the listing despite the low offer price for SIMP. Potential de-rating catalysts are a stock overhang following the listing and higher-than-expected earnings dilution. We advise investors to switch to Golden Agri." CIMB notes its target P/E for Indofood represents a 20% discount vs its Golden Agri (E5H.SG) target P/E. Indofood Agri is down 7.8% at S$1.88 in active trade; the orderbook tips S$1.85 support. (matthew.allen@dowjones.com)

0627 GMT [Dow Jones] Indofood Agri Resources (5JS.SG) extends its fall, down 15.7% at S$1.72 (its lowest price since November 2009) with over 53 million shares traded, as the market reacts to news its subsidiary PT SIMP prices its Indonesian IPO at IDR1,100/share, at the lower end of the IDR1,060-IDR1,700/share indicative price range. JPMorgan, which has a Neutral rating on Indofood, says the IPO price implies that the deal is being priced at 10.4X FY11E P/E, against Indofood Agri's FY11E P/E of 11.8X and the current Indonesia CPO sector average of 12.9X/11.5X for FY11E/FY12E. It says based on its calculations, "the PT SIMP IPO is valuing IndoAgri at just S$1.41 per share," around a 30% discount to its close Friday, before factoring in any upcoming M&A and any holding company discount. It adds, the US$408 million IPO proceeds would be just sufficient for its planned debt repayment of US$200 million and capex of around US$200 million. "IndoAgri's share price may remain an underperformer in the near term." (matthew.allen@dowjones.com)