Our pivot point stands at 5.33.

Our preference: the downside prevails as long as 5.33 is resistance.

Alternative scenario: above 5.33, look for 5.56 and 5.7.

Comment: the RSI is below 50. The MACD is below its signal line and negative.The configuration is negative. Moreover, the share stands below its 20 and 50day MA (standing respectively at 5.26 and 5.19).

Supports and resistances: 5.56 * 5.33 * 5.245 last 4.74 * 4.6 * 4.47


TRADING CENTRAL is a commentary service specialising in technical analysis

Every investor have their own method, which suits their risk profile/capital base, to make $$$. You have yours and I have mine.

Obviously your method is causing you hair to turn white.

iPunter      ( Date: 14-Aug-2010 18:51) Posted: Seriouisly, I don't waste my white hairs' time      worrying about such profound stuff as valuations...            The only trustable valuation is the market itself...                   hehehe...

In your post, you said SCI valuations still attractive and will be rerated on the back of Utilities incremental earnings.

I agree that we can expect Utilities earnnings will improve once Cascal and other projects come onstream.

Although you did mention the drop in Marine order books, did you take this into consideration when making the undervaluation and rerating statement for SCI as a whole?

For 1H10, Marine profit contribution was 58% ($198m) and Utilities was 32% ($109m).

In 2Q10, Marine saw a drop in revenue (-27%) but increase in profit (+28%). On the surface this may look good but in the marine business, this spells that in this period, there was a high level of completion of projects cos bigger percentage of profits are usually booked at the backend of the project.

Therefore, given that the marine profit contribution is almost double that of utilities, I can't see how the marine profit fall off (probably for FY2011) can be offset by Utilities increase.

Appreciate your comments and perhaps some estimates on how you came to the 'undervaluation' conclusion.

Cheers