Thursday, December 10, 2015

Stock Watch - RED SENA

I think RED SENA could turn out to be a very exciting company in the future...

  • Red Sena is a SPAC which has no operations or income generating business at the point of IPO but undertakes the IPO for the purpose of raising funds to acquire operating companies or assets in the Processed Food & Beverage industry with a focus on branded packaged F&B products, known as Qualifying Acquisition ("QA”).
  • The target countries for the QA are Malaysia, Thailand, Indonesia, the Philippines, Singapore and Vietnam.
  • Red Sena is formed by a group of enterprising senior management executives, professionals and entrepreneur who have extensive experience and network in the F&B and related industry with a view to harnessing their combined resources and contacts to create value for the shareholders of the Company
  • The growth of Red Sena will be through the acquisition of branded packaged F&B business which may have a combination of the following core operations:
    • Branding and marketing
    • Manufacturing
    • Wholesale distribution
  • Red Sena’s vision is to build the Company into a leading regional player in the branded packaged F&B business. 
  • Characteristics of RED SENA's Target QA:

Branded


  • Marketed and sold under a specific brand.
  • Targeted at end consumers
  • In the form of, among others, names, terms, signs, symbols, logos, designs or a combination of thereof.

Packaged


  • Sealed in a container such as bags, cans, boxes, bottles or cartons.
  • Packaged in small individual portions to cater for individual or household consumption.

Processed


  • Undergone transformation such as the finished product is significantly different from its original raw form.

Ready-to-Consume / Ready-to-Cook


  • Can be consumed or cooked directly from the package with some or no additional preparation

Pork-free & Alcohol-free


  • To cater to both Muslim and non-Muslim markets.
  • If QA’s F&B products which are pork-free and alcohol-free are not yet certified as Halal, Red Sena will work towards obtaining Halal certification.
(Information extracted from Red Sena's website)

Thursday, November 12, 2015

How a Market Operator "operates"

Interesting read...Excerpts taken from... 

PRESENTING: The Secret Trading Strategy From The 1930s That Hedge Funders Don't Want You To Know About...

..."So, let's look at an example of a typical market operation. Say a stock is trading in the $30-35 range and the pro sees it going to $60 soon...

He's trying to pick up 50,000 shares, but it's too much, so he starts by taking as much as he can between $30 and $35

He's trying to pick up 50,000 shares, but it's too much, so he starts by taking as much as he can between $30 and $35
Wyckoff (1937)
When it gets back to the top of that range, he forces the price back down so he can pick up more shares for cheaper
When it gets back to the top of that range, he forces the price back down so he can pick up more shares for cheaper
Wyckoff (1937)
"Then he forces the price down to around 30 by offering large amounts of stock and inducing floor traders and other people to sell their long holdings or go short because the stock looks weak. By putting the price down, he may sell 10,000 shares and buy 20,000; hence he has 10,000 shares long at the lower prices of his range of accumulation.
"By keeping the stock low and depressed, he discourages other people from buying it and induces more short selling. He may, by various means, spread bearish reports on the stock. All this helps him to buy. When he is thus buying and selling to accumulate, he necessarily causes the price to move up and down, forming the familiar trading ranges, or congestion areas, which appear frequently on figure charts."

Using this method, the pro will accumulate a large enough position to effectively remove almost ALL would-be sellers from the market

Using this method, the pro will accumulate a large enough position to effectively remove almost ALL would-be sellers from the market
Wykcoff (1937)
"Finally he completes his line. The stock now stands at 35, and, as he has absorbed 50,000 shares below that figure and other operators have observed his accumulation and have taken on considerable lines for themselves, the floating supply of the stock below 35 is greatly reduced. At 36 the stock is prepared for the 'mark-up.' It is ready to go up as soon as he is willing to allow it."
Then, he starts driving the price up to $60 by buying more shares – and he really ramps it up toward the end to coincide with the "good news" he is expecting in a few days' time
Then, he starts driving the price up to $60 by buying more shares – and he really ramps it up toward the end to coincide with the "good news" he is expecting in a few days' time
Wyckoff (1937)
Now, the pro has accumulated a huge position in the stock, and he needs to find someone to sell it to at $60. By now, people have seen the surge, and they think something's coming
"The process of distributing calls for much publicity so that the attention of the public will be attracted to the stock. The rise to 50 started a whole crop of rumors. Brokers who are close to the bankers or the management of the company have been trying to find out what is going on to make the stock so strong.
"Insiders have hinted vaguely that 'something good is coming out,' and without knowing just what this expected favorable news is, the brokers have put their clients into it. Considerable outside public following has been gained during the rise. The market for the stock is broadening."
Then, the news hits, and the pro can instantly unload 20-30k shares as people rush in to buy 

To finish unwinding his position, the pro does the exact same thing he did at the bottom – he works that stock up and down in a range until he's sold it all
To finish unwinding his position, the pro does the exact same thing he did at the bottom – he works that stock up and down in a range until he's sold it all
Wyckoff (1937)
"After this the price may recede a few points, but he, having sold a large part of his line, is willing to take a small percentage of it back at 57 to 56, and after this has been accomplished, and the activity has quieted down, he will mark the price up to 60 or 61 again.
"At that point he either turns seller, and markets the balance of his stock on the way down; orhe works it up and down in a range of a few points from the top, till he has completed his selling."
Source: Wyckoff (1937)
Now, the stock is in "weak hands" – everyone bought it on bullish news after a ~$30 rally
"The operator has now disposed of his entire line, and as the news is now known to the public and many people have bought and thus taken the stock off his hands, the stock may be regarded as technically in a weak position, for it is in what is called 'weak hands.'
"By this I mean it is held mostly by those who have bought at the top of a 30 point rise, when the news was bullish; most of these purchases being made on margin, the holders can be shaken out or tired out."