Updated: Jul 26, 2022
Mdm Chew Gek Khim, Executive Chairman, Straits Trading Company Ltd
Straits Trading Correlation Chart with Copper (6 mths Translation) & Straits Trading Daily Chart, 2-year
Straits Trading’s (listed in SGX) business segments are mainly focused on tin smelting and real estate. The company is unique in a sense that 86% of its revenue was contributed by tin resource segment but 64% of its operating income came from real estate.
On the chart above, we displayed the inter-market analysis between Straits Trading with Copper futures.
Pls note Copper is used as a proxy for tin as there is no available tin futures data to refer to. Based on our proprietary methodology, by pushing copper price action out by 6 months forward, we note that the inter-market analysis revealed a 65% probability (or correlation) of Copper futures leading Straits Trading by 6 months.
This also imply that there’s a 65% chance of Straits Trading trending above the resistance of $3.70 over the next 6 months.
From the Daily Chart of Straits Trading (inset), we can see that a decent entry price will be at around 3.30+/- (black horizontal resistance turned support line). A potential cut-loss level will be at 3.20 (yellow horizontal line). With such a setup (presume enter at 3.3, exit at 3.7 or cut loss at 3.2), we are looking at a very decent risk-reward ratio of 4x.
As usual, this writeup was broadcast to Clients on 14 April 2021 but posted here only on 17 Nov 2021.
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Image source: https://www.businesstimes.com.sg/companies-markets/straits-trading-launches-private-placement-to-raise-s809m-priced-at-s311-per-share