Wilmar Chairman and CEO Kuok Khoon Hong
Source: www.theedgemarkets.com
We are spotting some huge divergence in the Crude Palm Oil (CPO) price against the share price of Wilmar (see monthly chart above).
As can be seen from its monthly chart on the left, Wilmar's share price pretty much moves in tandem with CPO. Thus, on a short-to-medium term basis, this divergence should narrow back with either 1) CPO price coming back down, 2) Wilmar's price rising up, or 3) both moving to meet somewhere in the middle.
With both Wilmar's P/E and P/B ratios trading near historical lows, there is a good chance for price appreciation for Wilmar on a short-to-medium term basis.
On its daily chart, share price had broken above intraday resistance of $4.25 with KST crossing up 3 weeks ago in mid-Sep '21.
Prudent traders not willing to chase after the price can take guidance from the Stochastic indicator and wait for share price to pull back to oversold region before looking for an entry point to buy. Support of $4 can be taken as cut-loss level and the next resistance level is around $4.50, followed by $4.75.
As usual, this writeup was broadcast to Clients on 6 Oct 2021 but posted here only on 8 Oct 2021.
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Disclaimer:
This is an opinion piece. Please always do your own due diligence on the company's fundamentals & assess if the Fundamental / Technical analysis opinions are applicable to your trading/investing needs.
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