Is $ACR showing weakness after the false breakout?


Technically, Alsons Consolidated Resources, Inc. (PSE:ACR) price action on 30 March 2015 was a breakout from months of consolidation however, it was a false breakout after a high of 2.36 and closed at 2.14.  As of April 7, 2015, $ACR last traded price is 2.04 which is already in the bearish zone in the short term based on ichimoku elements. While in a weekly chart, there is still no sign of bearishness in midterm but seems approaching the bearish zone.  Long term trend is still bullish and intact.  The support to observe is the low on September 5, 2014 at 1.90 in a weekly chart.  However, looking at the daily chart, there are support levels which may bounce back at 1.99, 1.97, 1.94 and 1.91.  I don’t expect that the price action may move towards another support at 1.86 both in daily and weekly chart.  Range trade is also possible between 2.05 to 1.90.

Fundamentally, the earnings in 2014 as compared to 2013 was not so convincing due to non-recurring income in 2013 that lowers the net income attributable to the parent in 2014 at P0.359B with earning per share of P0.057.  With the current price of 2.04, P/E 2014 is high at 35.8. 

Based on Company forecast of 2015 net income of P0.613B or EPS at 0.098 at the current price of 2.04/share, P/E 2015 is 20.82.  Please note that average Trailing P/E  of Power Utilities is around 15 while P/E 2015F average is 17.  Therefore, the 2015 Fair Value of ACR should be around the range of 2 to 2.05. 

Disclaimer: This article is for information purposes only. There are risks involved with investing including loss of capital. The information provided in the website is only an opinion of the author and  does not constitute as legal advice, research or recommendation to buy or sell any securities.

2 thoughts on “Is $ACR showing weakness after the false breakout?

  1. Great analysis on ACR. I think whats really keeping ACR from breaking out of the 2.30 levels is not the fundamentals but the huge selling pressure that comes when the price reaches the 2.30 level. Rumor has it that this is a single seller with lots of shares. The motive? We can only speculate. Maybe what we can pinpoint for now is that a continuous range trade in the 2.0 to 2.30 levels could be a profitable proposition.

Leave a Reply