SHH - 2nd Wave in the making?

Chart : SHH daily chart as of Aug 22 2014 (source: ChartNexus)

SHH Resources is a holding company that through its subsidiaries engaged in manufacturing wooden furniture. The wooden furniture are mainly export to the US. Last few years has been difficult for the company due to the weak economy recovery of US. But things are improving over last few quarters as US economy recovery has start to gaining momentum. With higher payroll and lower employment rate, the US economy seems heading to the right direction. It is reflected on the performance of SHH as the company has been profitable for the last 4 consecutive quarters. With higher demand from US couple with stronger US dollar vs RM, the prospect of the company is quite optimistic. In addition, SHH is a net cash company with minimal borrowing thus it can rewards its shareholder with dividend if the company able to maintain its current operating performance.

The improved operating performance didn't go unnoticed. The share price of the company shoot up from around 60 sen to peak at RM 1.05 end of May this year . The spike in share price even drew an UMA from Bursa. After the spike, the share price has seen consolidating around 96 sen. Last Friday the counter shoot up again with significant volume and break its previous high of RM 1.05 to closed at RM 1.08 . This could be the signal for the start of the 2nd Wave. SHH is a thinly traded stock thus the share price can be moved with slightly huge volume. I think the counter is likely to have another good run.