SG: STX Pan Ocean Co. Ltd

Korean shipping company STX Pan Ocean Co. Ltd has found some support level at the range between $2.20 and $2.50 after the steep fall in the Singapore financial market. Its share price was about $4.20 just 3 months ago. Recently, Goldman Sachs downgraded this company from buy to neutral with a target price from $3.40 to $2.00 citing slowing global growth that may weaken carrier confidence.

Technically, the share price is still in a long term up trend (See T1 on chart 3) although its intermediate trend is down (See T2 on chart 3). The support level happened to be where Goldman Sachs’ target is, $2.00. However, it is below the long term 200-day moving average, which is currently at $2.52. The share price, as at 29 January closed at $2.38, right in the middle of the support range.

The price is currently considered oversold and there is a slight divergence in the momentum indicators against the price. This means that the current intermediate down trend is weak and therefore due for a rebound.

The $2.00 support level is crucial and the up trend of this share price depends on whether price is able to maintain above this level. Lower risk entry price is between $2.00 to $2.20 while current price has a little higher risk if $2.00 is used as a stop loss. Another risk to consider when an investor wants to buy is the fact that the market sentiments are not so encouraging. Therefore, trading short term is better and target price is $3.00.


Daily STX PO Asia chart as at 29 January 2008. Chart courtesy of NextVIEW