Cement again (2011-08-10 TCC International Holdings Ltd.)

Finally Hang Seng Index dropped below 19,000 but later remained above this level. It seems like this level is pretty strong which the index could hardly break at this moment, and its time for some rebound.

Let's find some good stocks for short-term investment.



Above is the daily chart of TCC International Holdings Ltd. (1136.HK). The principal activities of the Group consist of the import and distribution of cement in Hong Kong, the manufacture and distribution of cement, clinker and slag powder in other areas of the People’s Republic of China. (from: http://aastocks.com)

To me, cement companies are currently worth investing ones. There are lots of constructions in both Hong Kong and PRC that require lots of cement.

Also, when the stock markets are fluctuating like that and possibilities of default in US and some EU countries, China has to devote more effort into building infrastructures in order to boost its competitiveness against US or Europe. Cement becomes one of the most critical materials.

Technically, the green line nicely supported the stock price, which plunged following the over-1000-point slump in Hang Seng Index.

Moreover, a big white candlestick was formed yesterday. This is a possibly trend reversal pattern which signals an end of the bearish movement.

4.80 is undoubtedly the first resistance, which resisted the stock price from going any higher yesterday. If TCC breaks above it, I would expect it reaching the previous high at 5.50.

In longer-term, this stock is a good stock. Current ratio and Quick ratio both turned into higher than 1.0 in 2010/12. Compared with lower than 1.0 in 2009, we can see that the company is trying hard to lower their liabilities and increase assets. Though long-term debt/equity and total debt/equity both rose, the amount is not very non-reasonable and if the company could make good use of these debts, they could make a good profit.