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All posts for the month December, 2014

image2014-12-31 13-0-26

The past year has been a bumpy year for Hong Kong stocks, which surged to the peak in early September, plummeted over the rest of the month and were range bound until the end of the year. Approaching 2015, Hong Kong stocks appear to be stretched based on several OTAS factors, including EPS Momentum that has turned negative, directors who have been net sellers with over $344mm pulled out in the last month, and implied volatility at a significantly high level compared to its 2 year average.

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The companies with the most downgrades in EPS Momentum are mainly from the energy and retail sectors: MIE, Hengshi Mining, Phoenix Satellite, Esprit Holdings, Lianhua and NVC Lightings. These stocks’ EPS estimates have fallen by over 20% in the last month. In contrast, due to the weak outlook for the oil price and recent Chinese policy favoring financials, the transportation and financial sectors’ EPS estimates have increased noticeably: with China Yuran Food Group, China Shipping Containers, Global Brands Group, Haitong Securities, United Company, China Eastern Airlines, Midland Holdings, China Galaxy Securities, China Southern Airlines, Air China and Citic Securities’ EPS estimates all raised over 20% in the past one month.

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Activities of directors disposing company shares increased significantly in December, with a large portion from the energy and materials sectors, including well-known names such as Kunlun Energy, Nine Dragons Paper and Asia Cement. Implied volatility is at an 18 month high and suggests that Hong Kong stocks will be +/- 12.5% by the end of Q1 2015.

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Will it be a good time to dispose of the sluggish energy and materials sectors and invest more into transportation and finance in 2015?

To know about how to pick the top stocks in 2015.

Happy Trading!

Short Interest movers: Suez, Aggreko, Stmicroelectronics, Schibsted

Director Buys/Sells: Adecco, Aveva, Evonik, Kinnevik

CDS spread movers: Smiths, Soc Gen, Metro, Monte dei Paschi

Implied Volatility movers: Corio, ING, Saipem, Svenska Handelsbanken

Stocks trading unusually High Volume today

…and names in the news today…

…and finally those with High Volume traded yesterday 

6 most positively ranked stocks

6 most negatively ranked stocks

Short Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

STOCK

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
ADEN VX Buy Executive Director / Committee Thursday 18th Solid 20D Reliability, Solid 6M Reliability
AVV LN Buy Non-Executive Director Thursday 18th Excellent 20D Reliability, Excellent 6M Reliability
EVK GY Buy Chairman of the Supervisory Board Wednesday 17th Good 20D Reliability, Good 6M Reliability
CAST SS Buy Director Wednesday 17th Solid 20D Reliability, Poor 6M Reliability
KINVB SS Buy Director Wednesday 17th Mixed 20D Reliability, Mixed 6M Reliability
GTO NA Sell Executive Vice President Wednesday 17th Poor 20D Reliability, Poor 6M Reliability

CDS

Significant risers in past week

Implied Volatility

Significant risers in past week

Smallest movers in past week

What to watch for on Monday…

“I used to do a little but a little wouldn’t do it, So the little got more and more” – Guns N’ Roses

It’s almost uncanny, but the last three spikes in implied volatility in Europe have all reached the same level, while corresponding with market bottoms. It is also clear that it takes more and more volatility each time to goose a reaction from stock market investors, who are growing increasingly immune to the warnings signs.

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Implied Volatility across Europe’s large cap stocks peaked on 24 June 2013, 16 October 2014 and most recently on 15 December. All three dates corresponded with a bottom in the SX5E Index, but the latest sell off was both the most rapid and benign of the three. The level of volatility across the top stocks remains highly elevated compared with normal and hence still requires close inspection, but the latest bout of panic appears to be over before it has really begun.

Volatility is uncertainty, but is also the degree to which option investors expect shares to have moved in three months time. The current average level of 26 across the STOXX 50 indicates an expected range of +/-13%. This is more than the index fell in the ten days to 15 December and it has rebounded 5% since then.

It is perfectly plausible that volatility traders betting on specific moves in share prices over precise periods will be correct, while long term investors continue to ride out this volatility in the belief that share prices are still trending upwards. Possible QE by the ECB would provide an explanation of both positions. However, volatility is not just confined to stock prices and monetary policy and the full fallout from the strength of the dollar, the weakness of commodity prices, especially oil, and the capital withdrawal from Emerging Markets has yet to be felt. Index option investors may not know or care precisely where this fallout will come, but individual stock option investors provide us with a guide.

The highest levels of implied volatility among the STOXX 50 constituents are at UniCredit, ING, Siemens, RWE and Nokia. However, the highest sector relative level compared to normal are at Unilever, Siemens, UniCredit and SAP, with elevated relative levels at BMW, BASF and ING. Unilever tops this list and its absolute and relative levels of implied volatility are both flagging red in OTAS, as are both the upside and downside skew on its three month options. EPS Momentum is barely changed, valuation in the normal range and CDS low, but it won’t have escaped the option market that the shares are developing a habit of crashing back down to the trend line in forward EPS estimates.

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Short Interest movers: IMI, Carillion, Ophir Energy, Terna Rete Elettrica 

Director Buys/Sells: Commerzbank, BPE, Sabmiller, Genel Energy 

CDS spread movers: National Bank of Greece, BHP Billiton, KBC Group, Repsol

Implied Volatility movers: Ahold, Aegon, Hexagon, Skanska 

 

Stocks trading unusually High Volume today

…and names in the news today…

…and finally those with High Volume traded yesterday 

6 most positively ranked stocks
 6 most negatively ranked stocks

Short Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

STOCK

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
CBK GY Buy Supervisory Board Wednesday 17th N/A (untested)
GENL LN Buy Director Tuesday 16th Good 20D Reliability, Good 6M Reliability
BPE IM Buy Non-Executive Vice President Tuesday 16th Excellent 20D Reliability, Poor 6M Reliability
SAB LN Buy Managing Director Monday 15th Good 20D Reliability, Good 6M Reliability
SPR GY Buy Chairman of the Management Board Monday 15th Excellent 20D Reliability, Excellent 6M Reliability

 

CDS

Significant risers in past week

Implied Volatility

Significant risers in past week

Smallest movers in past week

What to watch for on Friday…

Short Interest movers: Suez, Atos, Michael Page, William Demant

Director Buys/Sells: British American Tobacco, Deutsche Post, Mediaset, Derwent

CDS spread movers: Soc Gen, Total, Eni, Erste Bank

Implied Volatility movers: Siemens, Nestle, Allianz, TUI

Stocks trading unusually High Volume today

…and names in the news today…

…and finally those with High Volume traded yesterday 

6 most positively ranked stocks
 6 most negatively ranked stocks Short Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

STOCK

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
BATS LN Buy Executive Committee Friday 12th Mixed 20D Reliability, Untested 6M Reliability
DLN LN Sell CEO, Executive Director (×2) Friday 12th Poor 20D Reliability, Mixed 6M Reliability
DPW GY Sell Executive Board Friday 12th N/A (untested)
HUH1V FH Sell Executive Vice President Friday 12th Poor 20D Reliability, Poor 6M Reliability
MS IM Sell Chairman of the Board Friday 12th Mixed 20D Reliability, Mixed 6M Reliability

CDS

Significant risers in past week

Implied Volatility

Significant risers in past week

Smallest movers in past week

What to watch for on Thursday…

Short Interest movers: Vallourec, Safran, Cap Gemini, BSkyB

Director Buys/Sells: Davide Campari Milano, SGS, Wood Group

CDS spread movers: Intesa Sanpaolo, Unicredit, Tesco, Statoil

Implied Volatility movers: Unilever, ING, Danone, Astrazeneca

 

Stocks trading unusually High Volume today

…and names in the news today…

…and finally those with High Volume traded yesterday 

6 most positively ranked stocks
 6 most negatively ranked stocks Short Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

STOCK

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
CPR IM Buy CEO Monday 15th Solid 20D Reliability, Untested 6M Reliability
SGSN VX Buy Executive Director / Committee Monday 15th Solid 20D Reliability, Solid 6M Reliability
WG/ LN Buy Executive Director Monday 15th N/A (untested)

CDS

Significant risers in past week

Implied Volatility

Significant risers in past week

Lowest movers in past week

What to watch for on Wednesday…

Short Interest movers: Suez Environment, Vallourec, Safran, Sainburys, UCB

Director Buys/Sells: Berendsen, KBC

CDS spread movers: Wendel, Old Mutual, Michelin

Implied Volatility movers: BP, Anheuser-Busch, Intesa Sanpaolo, Corio

Stocks trading unusually High Volume today

 …and names in the news today…

 

 

…and finally those with unusually High Volume traded yesterday 

6 most positively ranked stocks

6 most negatively ranked stocks

 Short Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
Sell Managing Director Wednesday 10th Solid 20D Reliability, Poor 6M Reliability
Sell Independent Director Monday 8th Mixed 20D Reliability, Mixed 6M Reliability

CDS

Significant risers in past week

Significant fallers in past week

Implied Volatility

Significant risers in past week

Significant fallers in past week

What to watch for on Monday…

 

Short Interest movers: ICAP, Safran, Metro

Director Buys/Sells: Berendsen, Deutsche Post, Banco Popular Espanol

CDS spread movers: SainsburyMichelin, Swiss Life Holding

Implied Volatility movers: Diageo, Corio, Arm Holdings

Stocks trading unusually High Volume today

…and names in the news today…

…and finally those with High Volume traded yesterday 

6 most positively ranked stocks
 6 most negatively ranked stocks

Short Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

STOCK

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
BRSN LN Sell Managing Director Wednesday 10th Solid 20D Reliability, Poor 6M Reliability
DPW GY Sell Executive Board Tuesday 9th Poor 20D Reliability, Poor 6M Reliability
POP SM Sell Beneficial Owner Monday 8th N/A (Untested)

CDS

Significant risers in past week

Significant fallers in past week

Implied Volatility

Significant risers in past week

Significant fallers in past week

What to watch for on Friday…

Oil has been down sharply over the past 3 months and is consistently hitting new lows. This has wreaked havoc on the energy sector, but has created some interesting buying opportunities. The price of oil collapsing has caused people to rethink if Tesla is a viable option for the future or if this is a short term blip on the radar. The world spent 700 billion dollars exploring for oil last year, the most ever! However only a 4 1/2 month supply was created. Clearly the world will need to eventually move to an alternative energy source.  If you believe Oil prices are the reason Tesla has decreased in share price, then now could be a great time to look at the stock.

Tesla1

Tesla vs. United Stated Oil Fund

Over the past 3 months Oil and Tesla have both fallen apart. Tesla is down 25.4% on an absolute level, and down 5.5% vs. the industry. During this same time period the United States Oil Fund is down -32.1%.

Tesla2

If we look at the 6 month price chart of TESLA, we see that the stock has erased its gains over that time period.

Tesla3

EPS Momentum

EPS is in the bottom 10% of its regional industry however, it has been slightly raised over the past month to -5%. Given the fact that oil prices have been so depressed, analysts are worried about the demand for electric cars, as well as how easy it is to sell cars directly to consumers.

Tesla4

Tesla is now technically oversold and a backtested Bollinger Band buy signal has fired on the shares. Typically Tesla rises 62% percent of the time in the 20 trading days after breaching the lower Bollinger Band, with an average return of 14% when successful. This creates a buying opportunity for a stock that has been sold off aggressively. If you still believe in electric transportation, now could be the time to increase position size.

Tesla5

Short Interest movers: Safran, Telecom Italia, Remy Cointreau, Bouygues 

Director Buys/Sells: Seadrill, Kuehne + Nagel, Unilever, Roche

CDS spread movers: Erste Group Bank, Hellenic Telecommunications, Tesco, Sainsbury

Implied Volatility movers: SBM, Anheuser-Busch Inbev, E On, Royal Dutch Shell

Stocks trading unusually High Volume today

…and names in the news today…

…and finally those with High Volume traded yesterday 

6 most positively ranked stocks
 6 most negatively ranked stocksShort Interest

Significant risers in past week*

Significant fallers in past week*

*D next to flag denotes dividend

Director Dealings

Recently Reported Priority Trades

STOCK

BUY / SELL

DIRECTOR JOB TITLES

Day Reported

Backtested return
SDRL NO Buy Chairman of the Board Monday 8th Strong 6M Reliability, Mixed 20D Reliability
GLB ID Buy Non-Executive Director Monday 8th N/A (Untested)
CAST SS Buy Director Monday 8th Solid 6M Reliability, Mixed 20D Reliability
ADN LN Buy Non-Executive Director Thursday 4th Solid 6M Reliability, Mixed 20D Reliability
KNIN VX Sell Executive Director / Committee Monday 8th Poor 6M Reliability, Poor 20D Reliability
ULVR LN Sell Executive Committee Monday 8th Poor 6M Reliability, Mixed 20D Reliability
SCHP VX Sell Executive Director / Committee Monday 8th Poor 6M Reliability, Poor 20D Reliability
ROG VX Sell Executive Director / Committee Monday 8th Poor 6M Reliability, Poor 20D Reliability

CDS

Significant risers in past week

Significant fallers in past week

Implied Volatility

Significant risers in past week

Significant fallers in past week

What to watch for on Thursday…