Will Federal be next to benefit from rotational playing?
(2003-06-10)

Will Federal be next to benefit from rotational playing?

THE local stock market is a fickle creature, with interest during the past month flitting from stock to stock in random, unpredictable fashion.

This is all the more prevalent in the penny stock segment, where small stocks have suddenly burst into life only to fall out of the picture with alarming speed.

In stockbroking parlance, this is known as 'rotational playing' - a trading pattern dictated by the whims and fancies of house traders who have the financial wherewithal to move prices suddenly and powerfully.

Catch it right and there's money to be made, but beware getting in on the tail end - the once-popular Leong Hin Holdings, for example, is now languishing at 14.5 cents after bouncing up to 27 cents last month.

The game, therefore, is to find a stock that hasn't been in play yet and shows upside promise. All the better if it makes money. But if it doesn't, it shouldn't matter that much - the top volume and percentage gainers lists over the past few weeks have been peppered with loss-making stocks.

One candidate to consider is oil and gas firm Federal International. A reasonably profitable company, the counter hasn't really moved in the past month and, at 23.5 cents, is still below its IPO price of 30 cents.

Daily volume has shown some signs of picking up during the past few days but the counter seems unable to break out above 25 cents despite repeated attempts.

Of course, Federal may never come into play and may continue to languish indefinitely, as it has for more than six months now. As we said at the start, much depends on whether the big house traders decide to 'rotate' into a stock or not.

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