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STX PO
-This counter is really interesting! It has been range bounce within a channel like climbing up a staircase. Right now, it is traded at the channel support again! It might rebound from here and head toward the channel resistance !!
Labels: Stock Pick
China XLX
This counter is looking good!
It has broken out from a Pennant on Monday but the volume was not strong enough to lift the price & propel the momentum further. However, it has entered into Parabolic SAR buy phrase. MACD line is crossing up the signal line today signaling a bullish reversal. Depending on the market, I may either execute the panic selling shopping list or pick up this counter! Target calculation: $.35 + $1.24 = $1.59 ( take this with a pinch of salt )
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UOB Kayhian TP: $1.84
CIMB TP : $1.80
OCBC TA Dated October 31, 2007 Below:
Labels: Stock Pick
Trading Digest 10/31
STI : 3,805.70 ( +7.25 ).
Most of the stocks in my watch list are doing pretty well but unfortunately it is not feasible to buy them all. Jiutian edged up 2.5 cents today, Lian Beng 2.5 cents. TechOil&Gas, sigh! Trendline support has been broken today! This is ugly! Need to find out what does the "right" do good to us!
All eyes are focusing at the FOMC meeting starting 2:15am tonight. Just in case Ben decided to make a hell out of the Halloween, here is the panic selling shopping list again:
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....................................Updated 10/31 ..............................
Cosco - $6.40 (Fibo 38.2%), $5.8 (Fibo 50%), BNP TP $8.6
SGX - $13.6 (Fibo 38.5%), $12.5 (Fibo 50%)
STX PO - $3.25 (Fibo 38.5%), $2.95 (Fibo 50%),
Yangzijiang - $2.30 (Fibo 38.2%), $2.10 (Fibo 50%), DBSV TP $3.04
ST Eng@ - $3.45, $3.15
Small Cap:
Lian Beng - $0.53 (Fibo 38.2%), $0.49 (Fibo 50%) CIMB TP $0.89
China Hong - $1.10 (Fibo 38.2%) or $1.05 (Fibo 50%), CIMB TP $1.47, ML $1.45
Jiutian - $0.58 (Fibo 50%), $0.53 (Fibo 61.8%)
Allco REIT - $0.95, Philips TP $1.68, DBSV TP $1.65
The idea is to buy when the prices draw near these level and not wait till the prices hit these prices as they may not hit at all!
Labels: Trading Digest
Trading Digest 10/30
STI : 3,798.45 ( -21.33 )
Sold 5 lots Golden Agri at $1.67 ( contra ).
Something about breakout play:
If the breakout is a valid one supported by high volume, it will usually receive 2 - 3 days of attention. Therefore, even if you enter after the price has risen for a few cents it should still be fine. After all, breakout play required some degree of price chasing. If the price will fall back and pick up your order, it is probably not a breakout. Actually, I am writing this to remind myself !
Golden Agri has broken out from its resistance. This is different from formation breakout but the end result is the same - cheong !!
Good call, Sylvia! Thank you Wai Meng!
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The feeling of having a few wining trades in a roll is great!
Labels: Trading Digest
10/29 Trading Digest
STI : 3,819.78 ( +48.23 )
As expected, STI has entered Parabolic SAR buy phrase today. Unless the outcome from FOMC meeting tomorrow night triggers a devastated impact to the market, STI should propel from here the score new high!
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Regionally, HSI has hit 31,586.9! Hongkongers are expecting the index to reach 33,000 while some expect it to hit 40,000!
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Trading log:
TechOil&Gas bought 10 lots at $0.76
Golden Agri bought 5 lots at $1.57
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Several other stocks in my radar have entered into Parabolic SAR buy phrase:
ASL Marine ( closed at $ 1.92 )
SGX ( closed at $15.8 )
STX PO ( closed at $4.04 )
Swissco ( closed at $1.37 )
Yanlord ( closed at $3.94 )
Labels: Trading Digest
TechOil&Gas
-Broker call !I agree because current prices of .76 - .77 appear to be at the channel support. WM%R in oversold and RSI at its support. Queuing 10 lots at .76 for mid term grow.-DJ MARKET TALK (October 24, 2007):
Technics Oil & Gas Off 6%; S$0.74 Support
0308 GMT [Dow Jones] Technics Oil & Gas (5CQ.SG) down 6% at 10-week low of S$0.79 as investors spooked by company's warning 2H07 profit to fall vs 1H07 due to further delay in yard operations' work schedules. Expected results set to weigh on FY07 net profit as 1H07 earnings of S$2.5 million less than one-third of FY06 profit of S$8.9 million; may also dash hopes of FY07 dividend payout (2 cents/share paid in FY06). On charts, RSI and Bollinger Bands show stock oversold, but too early to predict rebound in near term as daily volumes thin. Daily, weekly MACD still point to downward momentum. Support at S$0.74 (Aug. 17 low). (FKH)
Labels: Stock Pick
Golden Agri
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This one looks like a good call!
This counter has been traded in two channels as shown. MACD 4 red 1 green setting spotted on 10/24. WM%R centerline cross over taking place ( not completed yet ). Looks like recent consolidation has completed. Prices may hit channel resistance at $1.6. If it is able to break, it may propel further. Based on Friday candle, price movement on Monday may weaken slightly. Perhaps 1.35 - 1.4 is good entry!?
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iOCBC ( October 4, 2007 )
Golden Agri-Resources Ltd: Potential negative impact from new tax regimeSummary: Golden Agri-Resources' (GAR) recently completed 1-for-2 stocksplit, effective 11 September, has increased the accessibility of itsshares. Separately, in an effort to stabilise domestic cooking oil prices,the Indonesian government has again increased the CPO export tax to amaximum of 10% (from 6.5% fixed rate) under a new progressive tax regimeeffective September. Under this new regime, CPO exports are taxed at a rateof 2.5% to 10% for CPO price range of above US$850/ton to US$550/ton. IfCPO prices fall to below US$550/ton, no tax will be levied. Presently, CPOprices are at about US$772/ton. While this tax regime is likely to impactGAR's bottom line negatively, we believe that the continued strong demandfor CPO worldwide in the short to mid-term would help to support currentprice levels and also mitigate the negative tax effects. Therefore, we are maintaining our BUY rating and retaining our fair value of S$1.61 for GAR.(Selena Leong)
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CIMB ( Sept 25, 2007 )
Golden Agri (S$1.42) – Cheapest among Singapore planters
Labels: Stock Pick
STI Outlook ( Oct 29 - Nov 2 )
STI appears to be out of the wood from the recent correction. The daily candlesticks have scored "higher high" the past five sessions. Friday candlestick was a rising window ( bullish sign ) & WM%R is about to cross the centerline. Should the index climbs for another 50 points or so to 3,820, it will trigger the Parabolic buy phrase.
Same is true for Dow, WM%R is about to cross the centerline and should the index climbs for another 80 - 90 points to around 13.890, it will trigger the Parabolic buy phrase. What is interesting about this observation is that this crucial moment tallies with the FOMC decision for rate cut on October 31. Currently, the market has priced in a 25 basis points cut of the rate.
I have a feeling STI will take off again from here unless something very wrong happen to Wall Street (eg: no rate cut).
I am looking at picking up some Jiutian ,Lian Beng & Yongnam....
Basically, there are two ways to trade a counter using technical:
1. Buy when there is a buy signal ( eg: MACD crossover, WM%R crossover, Parabolic SAR buy phase... or all of the above combined ). However, bullish buy signal does not always provide the target or even if a target is determined, it is not always true. The question of risk/reward ration come in again .....
2. Buy when a stock hits the cyclical low. Typically, WM%R has been very accurate. When WM%R is below 80%, you can't go quite wrong in picking the stock. Unless that particular stock is forever bearish and always stay below the 80%.
China Hong comes under item 1 above. I have always like this counter ( and I did profited a little from it last week ) but I don't know if the bullishness will sustain. Entry at this time could be "chasing the moving train".
Jiutian, Lian Beng & Yongnam comes under item 2. All three counters seem to have completed the consolidation mode and are about to ( haven't yet ) turn bullish.
In the event if there is panic selling as a result of negative response of FOMC, SGX, Cosco can be good candidates to look at for contra during rebound.
Labels: Market Direction
Trading Digest 10/26
STI : 3,771.55 ( +64.41 )
Private home prices in Singapore highest in 10 years Prices of private homes in Singapore rose in the third quarter to their highest level in ten years, and even higher than an earlier estimate.
The Urban Redevelopment Authority or URA says in its finalised report that third quarter home prices edged up 8.3 per cent on-quarter. This is the same growth rate as in the second quarter. URA says from the end of 2006 to the third quarter of this year, private home prices have gained almost 23 per cent in all. Non-landed homes as a whole, rose 8.3 per cent in the third quarter, while landed homes rose 7.5 per cent, a tad faster than the 7.1 per cent growth in the second quarter. Prices of non-landed private homes in the core central region still rose quicker -- at 8.3 per cent. Prices of non-landed homes in the rest of the central region and the outside central region areas both gained 7.9 per cent. URA says at the end of the third quarter, there were 16.4 per cent more uncompleted units of private housing in the pipeline, or just over 65,400 units. The authority said a potential of 8,000 new units of housing remain in the government land sale programme for the second half of this year. These units can be sold to the public within the next one year or so, from the time they're sold to developers. URA also assured additional supply can be made available if necessary.Labels: Trading Digest
Trading Digest 10/25
STI : 3,707.14 ( +58.02 )
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Dow Jones nose dived up to 200 points last night soon after opening but traded upward to close down 0.98 point at 13,675.25. STI opened moderally higher but edged up strongly before closing.
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China Hong:
Ya, you might as well kill me !
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After exited yesterday, it rocketed to the sky today. Actually, I noticed it from the chart last night that it has crossed WM%R centerline but I just don't have the habit to chase the prices and thus did not re-enter today.
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Lian Beng:
Okay, this is another stock I noticed the WM%R has crossed the centerline today. Maybe this will be the next one that will skyrocketing.
Labels: Trading Digest
Trading Digest 10/24
STI : 3,649.12 ( -46.18 )STI traded higher in early session but pared gain just before lunch. The below writeup from DBS Vickers describe the market today very well:
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Stocks should open the session higher but may ease later in the day as traders lock in profits from the technical rebound that started yesterday. The Dow has rebounded to near the 13,700 short-term resistance level and may pullback, following weaker-than-expected outlook from Amazon.com that are currently driving the US futures market lower. Market trading activity is likely to quiet down tomorrow as investors await the release of banks result. DBS will be releasing its quarterly results on Friday and UOB on Monday.
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Trade summary:
China Hong - Sold 5 lots @$1.15
SembMar - Bought 2 lots @4.7 (For mid to long term)
Labels: Trading Digest
Trading Digest 10/23
STI : 3,695.30 ( +52.66 )
STI rebounded pretty impressively today considering the sharp plunge of SembMar, SembCorp & Cosco due to the scandal of SemMar ( see below ):
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Oct. 23 (Bloomberg) -- SembCorp Marine Ltd., the world's second-largest maker of oil rigs, fell the most in five years in Singapore after firing a former chief financial officer for foreign-exchange trades that may cost the company $248 million.
The shares, suspended from trading yesterday, slid 15 percent to S$4.74 in Singapore. Finance director Wee Sing Guan, 58, was dismissed for making the transactions, according to a statement late yesterday from SembCorp Marine.
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Charles & I have both thought that the index will weaken in the afternoon but unfortunately the market has proven us wrong.
Dow seems to have formed a new channel. Tonight closing is very important as it will decide whether the index will trade inside the channel or outside the channel. If it is inside the channel, Dow might retest 14,000 in the near future.
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STX PO continued to amaze me as a crazy hourse. Today, it rallied 42 cents to close at $3.72. WM%R managed to cross the centerline today. It seems like this crazy hourse is ready to retest its high of $4.24! However, a word of caution.... bearish divergence between the rising prices and lowering RSI is spotted.
Labels: Trading Digest
Trading Digest 10/22
STI : 3,642.64 ( -105.34 )
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STI did gap down 93 points (as anticipated in my earler post) upon open and traded sideway with downward bias throughout the day to close at 3,642.64. HSI loss 1,091.42 points to close at 28,373.63. Nikkei was downed 375.9 points.
I believe this round of correction will last for a couple more days. There will be rebound in between but STI is likely to shed another few more percent and hopefully find its support at 3,545 and recover from there!
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Trade Summary:
Bought 5 lots of China Hong @$1.04
Labels: Trading Digest
Analysts Warn Of Bubble In HK Market
The dramatic rise in Hong Kong share prices over the past two months has sparked fears that the market is experiencing a China-inspired bubble. Share prices on the main Hang Seng index have increased 36 per cent since late August, crashing through the 30,000-point barrier briefly on Thursday. Last week, Morgan Stanley released a report downgrading its market view of Hong Kong to "cautious".
It said it remained bullish on the fundamentals, but that the size of growth required to justify the current valuations has become untenable. The report added that market valuations were now on average 22 times that of earnings. Morgan Stanley said there was a 30 per cent chance the index could fall to 24,000 in the next three months. David Webb, a shareholder activist who has been pushing for reform in the Hong Kong market since the Asian financial crisis, runs a campaigning website.
He said a recent survey of the site's users showed that most believed the market could fall back to 14,000 points. The trigger for the record-breaking rise in recent months was the announcement by Chinese officials that they would allow mainland individuals to invest in Hong Kong. Investors believe that the huge liquidity slopping around Chinese markets will quickly make its way to Hong Kong, bumping up prices and creating a replication of the soaring Shanghai market.
Labels: Market News
STI Outlook ( Oct 22 - 26 )
DOW JONES
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Wall Street suffered heavy losses on Friday, a worst daily loss since August. Stocks fall on recession worries coincided with option expiration day. Dow plunged 366.94 points to 13,522.02 ( -2.64% ) and Nasdaq dropped by 74.15 to 2,725.16 ( - 2.65% ).
Dow has broken the support ( 13,550 ) formed by 50DMA, 100DMA & Fibo 38.2%. This is a very strong support considering it is a level confluence by the three components.
Next supports are 13,350 (Fibo 50%) and 13,150 (Fibo 61.8% & 200DMA)
-STRAITS TIMES INDEX- 
-STI should gap down 90 - 105 points tomorrow upon open and may edge down further when HSI open later at 10:00am where it may fall 800 - 1000 points. Buying opportunity arises when STI dips 120 points or more. However, the sharp plunge may last more than a day with minor rebound in between. So may be buying 30% on each plunge may be prudent.
As of the time this blog was updated, US Future is down -378 points and Nasdaq future is down -74.2 points. Asian market ( especially HSI ) will suffer heavy selling tomorrow. This may in turn trigger another round of selling in Wall Straits on their Monday.
Major Supports are: 3,545 (50DMA & 100DMA confluence with Fibo 38.5%) and 3,430 (Fibo 50% confluence with 200DMA)
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My shopping list remains:
Big Cap:
Cosco# - $6.40 (Fibo 38.2%), $5.8 (Fibo 50%), BNP TP $8.6
SGX# - $13.5 (Fibo 38.5%), $12.5 (Fibo 50%)
STX PO# - $3.25 (Fibo 38.5%), $2.95 (Fibo 50%), Deutche Bank TP $3.5
Yangzijiang* - $2.30 (Fibo 38.2%), $2.10 (Fibo 50%), DBSV TP $3.04
ST Eng@ - $3.45, $3.15
Small Cap:
Lian Beng# - $0.53 (Fibo 38.2%), $0.49 (Fibo 50%) CIMB TP $0.89
China Hong - $1.00 (Fibo 38.2%) or $0.945 (Fibo 50%), CIMB TP $1.47, ML $1.45
ChipEngS@ - $0.73 (Fibo 50%), $0.69 (Fibo 61.8%)
Jiutian - $0.58 (Fibo 50%), $0.53 (Fibo 61.8%)
Allco REIT - $0.95, Philips TP $1.68, DBSV TP $1.65
*STI new components stock
# WM%R not in oversold region yet ( maybe can wait for more drop )
@ WM%R already in oversold, any additional dip pose good buying opportunity
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Trading Strategy:
1. Buy 30% NEAR the first support, another 30% NEAR the second support if achievable. Another 30% is reserved for either further downside or when the market is on its way to recovery ( higher high, higher low )
2. Try not to be too kiasu to place the buy price any lower than the above supports or die die wait for it to hit the target prices otherwise you will never enter! Remember, this maybe the last chance of entry the market gives us before STI propel beyond 4,000. The target are good bargain based on support / resistance but the market does not need to heed our prediction. For big cap, 10 - 15 cents higher is okay. For small cap, 1 - 2 cents higher is okay.
3. Why is there so many stocks identified above? They are really in sequent of preference but whichever triggers the buy price first it is okay to buy.
4. Buying 2 lots of big cap will probably better than buying 10 - 20 lots of small caps. When the market recover, the big cap ( especially STI components stock ) will rebound faster.
Labels: Market Direction
Trading Digest 10/19
STI : 3,747.98 ( -61.71 )
As predicted in my Technical Analysis posted on last Sunday, the Straits Times index has weakened significantly this week. However, despite the index has fallen about 150 points from its high of 3,900+. Prices for many stocks are still not cheap. I guess most of the down days were not sharp enough in its plunge and that in between each fall the counters have chance to recover before the next dip. I believe buying opportunity will arrive next week when sharp plunges of more than 120 points occurs for one to two sessions consecutively. WM%R for STI has just dropped to below 80%. I think it is okay to start collecting cheap progressively next week ( before the next FOMC meeting on October 31 ).
Labels: Trading Digest
Trading Digest 10/18
STI : 3,809.69 ( -30.04 )
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October 19, 1987
Tomorrow is the 20 years anniversary of Black Monday! Let's see if this special date has any effect on the market!
On this day 20 years ago, DJIA dropped by 508 points to 1739 or 22.6% and similar drops across the world. By the end of October, HSI has fallen 45.8%, FSTE falled by 26.4%.....
Coincidentally, 1997 was Asian financial crisis.... So 1987, 1997..... 2007??
Labels: Trading Digest
Revamped Straits Times Index
30 Singapore listed component stocks
CAPITALANDCAPITAMALL TRUSTCITY DEVELOPMENTSCOSCO CORP SINGAPOREDBS GROUP HOLDINGSFRASER AND NEAVEGENTING INTERNATIONALHONG KONG LANDJARDINE CYCLE & CARRIAGEJARDINE STRATEGICKEPPEL CORPKEPPEL LANDNEPTUNE ORIENT LINESNOBLE GROUPOLAM INTERNATIONALOVERSEAS CHINESE BANKINGSEMBCORP INDUSTRIESSEMBCORP MARINESIA ENGINEERINGSINGAPORE AIRLINESSINGAPORE EXCHANGESINGAPORE PRESS HOLDINGSSINGAPORE TECHNOLOGIES ENGINEERINGSINGAPORE TELECOMSTARHUBTHAI BEVERAGEUNITED OVERSEAS BANKWILMAR INTERNATIONALYANGZIJIANG SHIPBLDG HLDGSYANLORD LAND GROUPLabels: Market News
Trading Digest 10/17
STI : 3,839.73 ( +29.01 )
What a day it was today! STI loss up to 74 point in early trading but closed up 29.01 points, a variance of more than 100 points.
Labels: Trading Digest
Trading Digest 10/16
STI : 3,810.72 ( -51.30 )
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1. STI loss 51.3 points today ( intra day bottom -73.14 points ) attributed by triple digits dip in Dow overnight ( -108, worst in 5 weeks ). The plunge today may not seem severe but it has its significant. The plunge has triggered the Parabolic SAR sell phrase and probably MACD crossover. The last time STI went into Parabolic sell phrase was July 26. It has caused the index to loss more than 500 points.
In the near term, I expect STI to have more rainy days than sun shire. I am not suggesting everyday are down day. There should be rebound after each major fall but in general there should be more down days than ups. The index should edge down as a result of the bearish phrase!
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2. Uni-Asia plunged another 21% or 41 cents to close at $1.54 today. I really petty those who chase the prices yesterday ( those who bought at $2.6, $2.7 or $2.8 ) have seen their money flashed down the toilet.
Labels: Trading Digest
Straits Times Index
Technical Analysis By iOCBC-
Getting long in the tooth.
- The Straits Times Index (STI) has risen past our forecasted resistance level at 3,870 and looks like it is beginning to consolidate as it is also near the upper band of the ascending trend channel. But should the index continue to creep higher, we expect weakness to surface around the 4000 level (refer to chart1).
- First, we have observed a quantitative trend behavior in the STI, which we highlighted in May 07, with regards to the index's performance against the 200-week moving average from 1980 to date. In this study, we aim to ascertain the percentage deviation of the index from the 200-week moving
average line before it reverses its trend.
- Over the last 26 years, the STI experienced 3 major rallies and 4 corrections. We are currently in the midst of the 4th significant rally. Through these rallies and corrections, the STI had deviated a significant percentage away from the 200-week moving average before it reversed direction. The smallest percentage deviation was approximately 141% and the largest percentage deviation was approximately 247%. The 247% deviation was an anomaly that occurred from 1997 to 1998.
- Based on these past 7 significant deviations, the mean was approximately 170%. If we removed the 1997-98 anomaly, the mean drops to approximately 157%.
- The STI now trades at 159% away from the 200-week moving average, surpassing the mean of 157%. Hence, we urge investors to be cautious and shorten their equity investment timeframe exposures (refer to table 1 & chart 2).
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- Secondly, our other quantitative study involves measuring the standard deviation channels at which the index has traded within historically to enable a projection as to where and when we could expect to observe a reversal in trend.
- The recent correction that unfolded in August occurred around the 1 standard deviation channel and rebounded off the line of equilibrium. Other times that corrections had occurred around this level were between 1994 and 1996. We also observed rebounds around the 1 standard deviation levels in 1986 and 1988. - The STI has now broken past the 1 standard deviation mark and is approaching the 1.5 standard deviation level. Consolidations and reversals that occurred around the 1.5 standard deviation level took place in 1999 and between 2001 and 2002. Hence we believe that the 1.5 standard deviation level, which is around 3,900 - 4,000, holds some degree of significance at this stage of the rally where we are likely to witness a reversal take place around this range (refer to chart 2)
- The conclusion derived from our quantitative findings suggests that the index is nearing some crucial ranges where we could witness weakness unfold in the weeks ahead. Immediate support level set at 3,550 and subsequent support set at 3,300.
Labels: Market Direction
Lesson From Uni-Asia
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-Today got to be the darkest day to those who have been chasing the prices of Uni-Asia for the past two weeks. This counter was traded at around $0.65 on Sept 24. Within 2 weeks, the prices rose 4.5 times to hit a high of $2.8 today before the sydicate triggered a sell program at around 4:09pm. Within 45 minutes or so, this counter tumbled 22% or $0.55 to close at $1.95. There are pages of threads started by forumners of CNA Market Talk. Some said they lose $30K all of a sudden!Labels: Trading Digest
Trading Digest 10/15
STI: 3,862.02 ( +4.77 )-Hongguo (Potential Breakout From Flag Formation)
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It seems like a flag formation is in the making. However, a formation is not a formation until it is fully formed and breakout. So do not trade this now until the breakout ocurrs.
How to monitor & trade this:
1. Go to your online trading platform and set an alert with these criterias:
---> Volume = or > 5 millions, Price = or > $1.25
2. If volume objective is met on or around mid-day, the likelyhood is that this is a valid breakout. If volume objective is met only toward the end of the day, you may negate the alert. Why mid-day? Since a breakout MUST accompanied by high volume. By setting a volume objective of 5 million by mid day, full day volume shall be 10 million or more. If 5 million is achieved at 4:30pm or so, that is full day volume and it is not considered high volume for this counter.
The price target is around $1.55 depending on at what price the breakout takes place. So at the time you receive the alert ( at $1.25 ), you still have plenty of margin to take your position.
Again, it is too early to tell if this is a valid flag formation. So do not enter until the formation completes and breakout. If you set the above alert and if you receive the alert any time at mid-day, you can safely enter at the current price at that time.
Labels: Trading Digest
STI Outlook ( Oct 15 - 19 )
Since the return of the bull after the sharp plunge on Aug 17, the market has been extremely strong and resilient! It has negated quite a few bearish technical signals such as the prominent bearish engulfing candle on Oct 10. However, this is not a good sign because for a healthy market to be sustainable, it needs to pull back slightly before it continues to propel further.
-STI Daily Chart:
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The bearish divergence between daily prices and MACD Histrogram & Stochastic are getting imminent. Both MACD line and Stochastic are showing signs of tilting downward. Parabolic SAR is tial gating the daily prices closer and closer. Any weaknesses of the market in the forthcoming week will surely turn STI into Parabolic SAR sell phrase.
Friday closing happened to be Bearish Harami candle.
- STI Weekly Chart:
-Last week closing has given the weekly chart a doji. Again, doij by itself is not necessary a bearish signal. It simply indicates indecision of the market. It is a three days ( or three weeks when used in weekly chart ) pattern. Next week closing will serve as a confirmation of the following week(s) movement. But depending on the Doji position, it can give hint to market sentiment. In this case, the doji is positioned in the "evening star" position. So the likelyhood is that the market will be bearish the following one - two weeks. In the chart above, I have highlighted a previous doij spotted in June and the subsequent week's closing.
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Overall, I am bearish about the market in the forthcoming one to two weeks. But I cannot argue with the trend. The trend has been extremely strong, that is no doubt about it. The bull may choose to negate the above observation again and charge higher.
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In the Wall Street, the market is cautiously bullish because no body want to be early sellers ahead of the earning season and next FOMC meeting on 10/31. Earning anouncement day for some big names - Google 10/18, Apple 10/22. Charting wise, daily chart is bearish while weekly chart shows a doji.
Labels: Market Direction
Trading Digest 10/12
STI : 3,857.25 ( -18.52 )- 1. On leave today and out the whole day, did not monitor the market.2. ASL Marine, worth taking a look!-Lian Beng (Breakout From Pennant)
What is Pennant?
Pennant is a chart formation of trend continuation. It is charaterised by a few days of rally supported by high volume ( 10/1 - 10/5 ). After that, the rally takes a breather with declining volume ( 10/8 - 10/11 ). During this period, the prices are range traded with smaller & smaller breath forming a small symmetrical triangle - The Pennant. Breakout ocurrs toward the Apex ( the tip of the triangle ). A valid breakout must accompanied by high volume, which is the case for today.
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Example of a Pennant breakout & how it has met price target objective (Lian Beng, Feb 07):
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Elliot Wave course at SGX registration closed !!
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Labels: Trading Digest
Trading Digest 10/11
STI: 3,875.77 ( +61.32 )
-I know it is quite embarrassing where I have used the largest font size and bold the words for "Bearish Engulfing" as if the market will collapse today but instead it rallies to the sky! According to TA, it is supposed to be a bearish day following a bearish TA signal! However, I am not responsible for the market behavior. Technical Analysis is a set of techniques used to predict the market movement. But no TA expert can draw a triangle or a flag and expect the market to trade within that triangle or flag. The market does not need to heed the command of TA experts, neither nor any TA expert has the ability or power to do so. If the prediction does not work (it wasn't wrong, every blogs I visited, everyone spotted the same candle pattern), we just need to look for other indications again. The market is not straight forward. We must accept variance. This is amongst the first thing we learnt from the first TA lesson. In any case, I have been mentioning the local market don't really heed candlestick very well given our small liquidity versus US & Japan market. The BBs are looking at the same chart. If they want us to see a shooting star, they can create a shooting star for us. If they want us to see a Harami, they can create a Harami! Conversely, if they want to overturn a candle that is already formed, they can.
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HSI is resilient today probably due to the good news their government had delivered yesterday on new policies and taxation. Locally, there are lots of liquidity supporting the market plus we often look to Nikkie or HSI for direction.... That could be why the market refused to come down.
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STX PO continued to be the market darling lately. Ultro, Sinostar are gaining popularity today. Ultron has been cited as the next penny play, successor of Jasper, banjoo and so on.
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Elliot Wave
SGX will start a 12 hours course on Elliot Wave starting next Monday. I am 80% sure I will sign up. Although I know Elliot Wave in the nutshell, I do not know how to apply it in real life. I think Elliot Wave is very useful in addition to all the TA indicators and classical analysis. You don't want to enter a trade where the TA indicators show bullish but it ended up in the wrong wave count. I know Elliot Wave is not easy to apply. The analysts at UOB Kayhian has recently made two mistakes in the Elliot Wave count for STI ! Unfortunately, this course is conducted in Mandarin. Despite being a "helicopter", I would have preferred it to be conducted in English!
Labels: Trading Digest
STI Direction
Bearish Engulfing
STI closed with a Bearish Engulfing candle today. This is a bearish technical signal suggests that the index may ease further after dipping 51 points today. Immediate supports are 3,760, 3,715 and 3,670. Once the index pulls back to 3,780, it will trigger the Parabolic sell phrase. Volume has been on the decline while prices continued to climb higher during the past sessions. Both the candlestick pattern & price/volume divergence signaling a possible short term reversal.
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Lian Beng - $0.492 (Fibo 61.8%) or $0.464 (resistance turns support), CIMB TP $0.89
China Hong - $1.05 (Fibo 61.8%) or $0.96 (resistance turns support), CIMB TP $1.47
Jiutian - $0.64, $0.59, $0.54
Allco REIT - $1.02 (Fibo 61.8% & support), Philips TP $1.68, DBSV TP $1.65
Cosco - $5,8 (Fibo 61.7%) or $5.5 (resistance turns support), BNP TP $8.6
Yangzijiang* - $2.16 (Fibo 61.8%) or $1.93 (resistance turns support), DBSV TP $3.04
STX PO - $2.93 (Fibo 61.8%) or $2.52 (recent low), Deutche Bank TP $3.5
*STI new components stock
Labels: Market Direction
Trading Digest 10/10
STI : 3,814.45 ( -51.3 )
1. STI gaps up 33 points to open at 3,899.29. Within minutes, it hits a record high of 3,906.16. Thereafter, it has been trending down throughout the trading day and closed down 51.3 points at 3,814.45. The early gain was driven by Dow record closing of 14,164.53. Dow opened flat last night but rallied after lunch when FOMC released the minute of meeting which suggested inflation is not a major threat anymore. Moving forward, the focus will be on the earning. Google share price has broken $600. Next Tuesday, Yahoo & Intel will release their earning reports. The current market prices have been "price to perfection". So any disapointment on earning result may cause some volatilities because the good news are already priced into the current prices.
Labels: Trading Digest
Trading Digest 10/9
STI : 3,865.75 ( +45.44 )
I have reviewed the past few tips from sparrow. I think his accuracy is at best 50%:
Sept 28 - -> Sun East: +.015Oct 2 -------> Ochard Parade: -0.03Oct 3 -------> China Wheel: -0.01Oct 8 -------> ChinaAElec:+0.07This is not as impressive as another forumer "big_brother" who recommended Aztech. Not only has he predicted correctly the stock is in play, 10 minutes before the rally, he wrote in the forum "lai liao" and true enough 10 minutes later the volume came and gobble up all the buy queue moving the price up several bids!
I will just write off sparrow and move on to hunt for other better sydicate player's tip.
Labels: Trading Digest
Trading Digest 10/9
Lorenzo ( Speculative Play: Enter $0.42, TP: $0.62 )From the same foumer Sparrow! But I still won't load up as I prefer to observe the accuracy more. So far, I have heard from other forumers they ended up cut loss for China Wheel & Ochard Parade.
ChinaAElec (Speculative Play Update)Wow, sydicate play in action! Prices are edging up!Labels: Trading Digest
Trading Digest 10/8
STI : 3,820.31 ( -2.31 )
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1. Singapore shares pared gains in afternoon trading, as investors took profit after chasing the Straits Times Index to a new record high of 3883 points, in morning trade. STI gapped up 38 points upon open (driven by good employment data released on Friday in the US) but ended the trading day down 2 points, 3820.
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2. Stock Review:
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ChinaAElec
Again, this is NOT a counter I advocate due to the poor fundamental ( loss making, high P/E ). I picked this as a case study to see how reliable are tips picked up from CNA Market Talk. According to sparrow, the forumer who recommended this counter ( see here ). The entry price was supposed to be .70 and target at .87. So despite that this counter opened at .79 and edged up to .81 before it trend down throughout the day. To be fair to sparrow, I consider that it is downed by 1/2 cent so far. Let's see how it fair moving forward..... I will give this counter two weeks! The last time sparrow recommended TT Int'l, it was not accurate. But there were other forumers like "big_brother" who recommended Aztech, Ace Achieve...etc. were quite accurate! CNA Market Talk is an excellent resource for news, rumors, tips, trading strategy.... However, it is also a very rowdy place. You probaly need to filter out 80% of the posts before you get down to the essence of it. If you are not careful, you may even fall into traps deployed by forumers with a motive. There are many different groups of forumers out there. Some are good in FA ( Henryling, Qiaofeng, Johnlaw... ), some are good in TA ( Joshing, 7's, RallyArtist (see here), SQ009, cclow...etc. ), some are good in tips ( big_brother, sparrow .... ) probably because they themselves are sydicate players, some have many followers ( puntfast, brave_bear....), but most of the rest are good for nothing, just talk rock! My pick for the most outstanding TA trader ( who turned as a remiser with POEM ) is Joshing. See his thread here ( Joshing thread ). .
LC Development
I think this is a much safer pick versus ChinaAElec although you never know, the latter may truly rally due to speculative play up by sydicate! LC Development did soften today to close at .525 as observed from the doji ( Doji is a 3-day pattern ). As stated, I will not take up any position although I have full faith in the technical buy signal. I am still apprehensive about the index at large! HSI is exhibiting some weakness today. If HSI & Dow are going to lausai the next 1~2 weeks, STI will not be spared.
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It is important to note that any counter cited with technical bullish signal probably required 2 weeks or so for the signal to turn into action. It is not going to be the next day affair. Next day affair comes from 'sydicate play' recommendation. Technical takes time.....
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China Hong
Still waiting for weaknesses to enter.....
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Hiap Hoe
Breakout from price level .97 which is a resistance turns support turns resistance....
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ChipEngS
This will be the next counter I am looking....
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Longcheer Update
Daily chart just turned bearish but weekly chart is bullish. Weekly chart is more powerful and meant to give mid turn perspective. Within the bullish phrase of the weekly chart, the daily chart may swing between bullish to bearish to bullish again. But overall, the stock should move up over a period of 3 - 6 months.
Labels: Trading Digest
Stock Watch
October 8, 2007 (Speculative Play)
China Auto Electronics (ChinaAElec)
It is a RTO counter to be relisted tomorrow (8 Oct 2007). Formerly it was known as China Transcom Technologies and taken over by the TEC Group. Brokerage firm placement price at 58 cents. Pre-suspended price on 5 Oct 2007 was 61.5 cents. Tomorrow could be the right day to get re-listed as China play will be in the limelight.
Traders from CNA Market Talk are speculating a target of $0.87.
Note: the P/E for this counter is 768. I won't want to be stuck with this counter if the tip is not zhun. Just for observation of how punter works on speculative play.
Labels: Stock Pick
Stock Watch
LC Development (Trading Play)
I picked this up from another blogger's site. I have reviewed the chart and I agreed technically this counter deserves a buy call.
Weekly Chart:
Parabolic SAR in buy phrase.
Daily Chart:
Breakout from Ascending Triangle supported by high volume. However, Friday closed with a doji. Monday/Tuesday may soften slightly to allow more attractive entry ( .53 ~ .52 ). Again, I repeat "may soften", not 100% will. Doji represents indicision of buyers/sellers. Confirmation of next day closing is necessary to determine next few days' trend.
Target price: $0.655 based on past peak (resistance). Target price based on breakout calculation : $0.75.
It is important to note that for trading play, we normally don't exit exactly on the target but before the target just to play safe in case everyone else are waiting to exit at the target. If you are aiming at .655 as the target, perhaps .62 would be the exit point.
I have not been monitoring this counter and thus I probably won't trade. Furthermore, I still think there will be an upcoming technical adjustment of STI before it hits 4000 (Joseph Cycle predicted STI will hit 4300 before it U-turn). But I will use this as a learning example to see how TA signal fair. I will paper trade 20 lots at $0.53 and see how thing goes within two weeks.
On the other hand, let's go back to 8/23 and take a look at the buy call for Swissco. At that time, the price was $1.16 but it has hit $1.5 on 10/2 ( and closed at $1.37 on last Friday ). So TA buy signal does work!
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KELIVE Research target : $0.78
Labels: Stock Pick
Stock Watch
China HongThis continued to be a counter I believe in. I started watching it when it was in the $0.7+ and it is now $1.15 (it hits a high of $1.31 on 10/2). Some time, watching a stock for too long without taking any action is not a good thing. But for now, I believe China Hong may retrace slightly in the near future. Will wait for the right time to get in.
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Weekly chart of China Hong is in Parabolic buy phrase. That means, it is still pretty safe to go long. However, the immediate past week candlestick shows a long legged doji ( possibly a "shooting star" ). It suggests a short term weakness of this counter. Last Friday's closing sat tight at 38.2% Fibo level ( $1.15). Next two supports are Fibo 50% ($1.10) & Fibo 68.2% ($1.05). After that, the next support is $0.955. A good entry based on present market condition is $1.05 or $0.955. Again, this view is based on present market condition ( ie: STI stays healthy ). Should there be a major correction in the near term, the level to look for are: $0.89 and $0.79. Either prices are probably a steal for this counter if you are willing to hold on to it for 6 months to 12 months.
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Daily Chart:
The Daily Chart tallies with Weekly Chart in that China Hong is showing short term weakness corrspond to the long legged doji in the weekly chart. Volume has been declining since 9/25. Daily prices look set ( hasn't yet ) to hit Parabolic SAR which will turn it into sell phrase.
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DJ MARKET TALK ( Oct 5, 2007 ):
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CIMB Raises China Hongxing Target To S$1.47
0113 GMT [Dow Jones] STOCK CALL: CIMB raises China Hongxing Sports (BR9.SG) target to S$1.47 from S$1.20; reiterates Outperform. Target upgrade reflects roll forward to 2008 from 2007 earnings, forecasts unchanged; still reflects 24X P/E ratio. "Orders received during Hongxing's latest trade fair increased by an estimated 64% year on year." Adds store rollout on track; 410 new stores opened as of end August, aims to open another 190 by year end. Shares +0.9% at S$1.12. (KIG)
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JF Asset Management increased its holding on September 27.
Labels: Stock Pick
STI Revamp In January
STI revamp goes live in January By Yasmine Yahya
Come January, investors will see a brand new Straits Times Index.
Following a cooperation agreement with index designer and manager FTSE, the number of component stocks on the STI will be reduced to 30. In addition, 17 new indices will be created. The revamp will mean that FTSE's index design methodology will be applied to the Singapore market, making it easier for investors to make cross-border comparisons and analysis. All companies currently on the SGX mainboard will be filtered by market capitalisation, then screened for free float.
Free float is the share capital of a company that is freely available for trading by investors. Afterwards, the stocks will be liquidity tested, and then free float weighted. The top 30 companies ranked by full market capitalisation that pass these tests will then make up the STI. The next 50 will make up the FTSE ST Mid Cap Index.
Following that, companies within the top 98 per cent by market cap which are not large enough to be part of the STI or Mid Cap Index, will make up the FTSE ST Small Cap Index. The remaining 2 per cent of companies will make up the FTSE ST Fledgling Index.
Head of Data Services at Singapore Exchange, Lai Kok Leong, says the creation of the new indices will comprehensively benchmark the entire Singapore marketplace. "For the retail investors, they will always be looking for investment opportunities into different segments of the marketplace. So this series of indices allows them to have a clearer view of the marketplace. From the issuers perspective they are also always looking for investment ideas to launch new products based on the indices. Again, these indices will meet their needs in this aspect. For the listed companies, we'll actually be profiling a lot more listed companies via these indices."
A trial will be made available on the FTSE website starting Monday for investors to familiarise themselves with the new system. For this trial calculation period, all 19 indices will commence with a starting value of 1,000. But in January, on the day that the new STI goes live, it will be re-based to the same value as the current STI on the previous day's market close. -
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Straits Times Index (STI)
With a 40-year history, the STI is the leading market barometer of the Singapore stock market. Its primary objective is to reflect the daily trading activity of stocks on the Singapore Exchange (SGX). The STI is currently managed by a special STI Committee formed by the Singapore Press Holdings (SPH).
The index is managed with the following objectives in mind:
• The key selection criterion for the STI is liquidity as measured by a stock's average daily traded value.
• The committee also strives to have the percentage share of a sector's representation in the index by market capitalisation reflect the sector's share in the total SGX.
• Within each sector, stocks with a bigger market capitalisation are preferred over smaller stocks.
• The target of capturing 60 per cent of the total market capitalisation is set. Real-time calculation of the index is done by the SGX.
The methodology and composition of the STI has been altered several times over the years, in line with changing market trends. The most recent occured on 31st August 1998 when the current STI replaced the Straits Times Industrials Index (STII). This was in response to a major sectoral re-classification of listed companies by the Singapore Exchange that did away the "industrials" category of stocks. The index was constructed by SPH, in conjunction with the SGX and SPH's consultant, Associate Professor Tse Yiu Kuen from the National University of Singapore.
As part of a new partnership between SPH, SGX and FTSE, the STI will undergo another revamp by the end of 2007 - this time to reduce the number of constituent stocks from about 50 to 30. The index will also be calculated by FTSE according to its internationally recognised methodology.
How we construct the STI
• The committee first ranks all the stocks listed on the SGX by liquidity as measured by their average daily traded value over a period of 12 months. It also looks at rankings over periods of 6 months and 36 months to get an idea of the stock's liquidity over the short, medium and long term.
• Next, the stocks are ranked a second time by their current market capitalisation.
• The stocks are also sorted according to their industry sectors.
• STI constituents are then selected to ensure that the index covers a reasonably large proportion of the SGX's trading liquidity and market capitalisation. The current target is for the index to cover 60 per cent of both. The committee also ensures that no one sector is over-represented in the make-up of the STI.
• Finally, a weight is applied to each stock based on its free float percentage.
Labels: Market News
Trading Digest 10/5
STI : 3,822 ( +38.81 ) Vol: 4,007.1M
STI Weekly - Not a shooting star after all
On Wednesday & Thursday, the weekly candlestick of STI really look as if it is a shooting star. But with the strong closing on Friday, the white body of the weekly candle become longer than the wick. It is no longer a shooting star in view of the body/wick ratio (shooting star typically has a long wick & short body).
The strong closing of STI on Friday caught me in a surprise. With US awaiting the employment data, I thought STI will be moving sideway / flat. The market is still pretty irrational!
On the STI daily chart, the daily candles are still moving away from the uptrend channel resistance toward the center of the Bollginer Band. Let's see how it develops in the coming two weeks. Friday closing has given the momentum indicators a boost.
Labels: Trading Digest
Longcheer Update
Bullish ReversalWeekly chart has just turned bullish with Parabolic SAR turns into buy phrase! The last time Parabolic SAR hits the weekly chart was early November 2006. This has sent the stock price up from .9+ to 1.2+ in February. It is unlikely Longcheer will hit the historical high given that it represents 80% upside or so. But I am hopeful the bullishness as witness from the weekly chart will wake up this baby.
Stochastic is trending up in the weekly chart too!
Labels: Stock Pick
Trading Digest 10/4
STI : 3,783.81 ( +29.19 ) Vol : 3,999.8M Weaknesses Ahead!STI has been trading within an uptrend channel since it recovered from the major dip on Aug 17. Based on momentum indictors, the index has been in the overbought region for one month now. RSI & WM%R are showing signs of fatigue. Parabolic SAR looks set to turn into sell phrase should the daily candlestick dips slightly more. STI may come down and touch the uptrend support coincide with Fibo 38.2%, 50%, 61.8% and the 25DMA.
STI Daily Chart
STI Weekly Chart
STI weekly chart shows a shooting star candlestick. With one more trading day to go, let's see if this will change by tomorrow.Most of the counters under my watchlist are about to enter the sell phrase too. Counters to watch: Jiutian, China Hong.
Labels: Trading Digest
Trading Digest 10/3
STI : 3,754.62 ( -39.21 ) Vol: 3,642.5M
1. STI hits a record high of 3,851.88 during intra day before it closed down 39.21 points at 3,754.62. The swing between 2:37pm ( 3,851 ) to 3:46pm ( 3,744 ) was 107 points. The closing today gave STI a 2nd black candle after it has hit record high. RSI & WM%R have stayed within the overbought for quite some time now. WM%R exhibit sign of reveral. I am betting STI should ease further in the coming days since the market has been overbought. Immediate support is 3,680.
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STI:
Asian markets hit by profit taking after record high
Goh Eng Yeow Wed, Oct 03, 2007
The Straits Times MARKET sentiment was badly spooked by a strong wave of programme selling by hedge funds in late afternoon trading, which forced several Asian markets to relinquish the fresh highs conquered earlier on Wednesday. In particular, China stocks in Hong Kong and Singapore were badly bruised by the selldown. The benchmark Straits Times Index here fell 39.21 points, or 1 per cent, to 3754.62, after hitting an intraday record high of 3851.88, while Hong Kong's Hang Seng Index was down an eye-popping 719.81 points, or 2.5 per cent, to 27,479.94. But the very volatile market conditions bolstered overall market volume to 3.31 billion shares worth $3.69 billion. On the scoreboard, there were 684 losers and 234 gainers. "Going by the way the selling across the region is co-ordinated, it is obvious that hedge funds are at work, taking profits on the recent big gains on China stocks. At 2.30, STI and Hang Seng were in top form, only to collapse almost simultaneously at around 3.30," noted a remisier on Wednesday. Big blue-chip losers here included DBS Group Holdings which lost 30 cents to $22.20 and property giant City Developments which fell 60 cents to $16.30. But bucking the trend was Singapore Exchange which closed at a record $15.20, after advancing 80 cents. On the broad market, China plays were the big losers, as they succumbed to a second day of profit-taking, after racking up spectacular gains recently. The PrimePartners China Index closed 11.4 points, or 3.7 per cent, down at 298.5. Among the losers were punters' favourites such as Sino-Environment lost 28 cents to $3.64, while frozen dumpling maker Synear Food fell 16 cents to $2.15. Looking ahead, Morgan Stanley Research noted in a report on Wedneswday that Asia-Pacific markets have become unattractive after the sharp run-up last month. It said: "The 12-month forward price-earnings ratio of 16.6 times is at a 13.1 per cent premium to the MSCI World Index and a 9.6 per cent premium to the US S&P 500 shares. ..Further upside most likely requires strong liquidity conditions, substantial fund inflow from both foreign and domestic investors and euphoric investor sentiment."
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Labels: Trading Digest
Trading Digest 10/2
STI : 3,793.83 ( +38.61 ) Vol : 4,481.9M
1. STI rallied today along with all Asian bourses as investors were heartened by record close of Dow overnight. Dow rose 191.92 to close at record high of 14,087.55. STI hits an intra-day high of 3,829.52 at around 10:09am.
2. The rally in Wall Streets came as a surprise to me as the market has obviously negated bad news from Citibank, UBS and Credit Suisse ( see below ):
Citigroup warns of a 60 percent drop in Q3 profit Citigroup has warned that it foresees a sharp fall of around 60 percent in its third quarter profit due in part to failed mortgage investments.
The largest bank in the United States said the plunge in quaterly profit was mainly a result of losses tied to mortgage-backed securities and also a slowdown in big corporate mergers and acquisitions.
The banking giant's chairman and chief executive officer, Charles Prince, described the expected profit decline as a "clear disappointment," but voiced optimism that earnings growth would improve in future months.
He said he expects the bank to return to a normal earnings environment in the fourth quarter.
Some investors and analysts have called for Mr Prince's resignation following Citi's profit warning.
Deutsche Bank analyst Mike Mayo said a 6 billion U-S dollar write-down is the tipping point of bad performance at the company.
Citigroup is due to post its quarterly results on the 15th of October.
UBS and Credit Suisse issue Q3 profit warnings The world's largest wealth manager, UBS, said it would write down 3.4 billion U-S dollars in its fixed-income portfolio and other assets, resulting in a third-quarter loss of 515 million to 690 million U-S dollars.
This would be UBS's first quarterly loss in nine years.
The Swiss banking giant said it would shed 1,500 jobs in its investment bank or 7 percent of the division's 22,300 staff.
UBS's Investment bank head Huw Jenkins, who drove a rapid expansion in the Swiss bank's bid to join the top five investment banks worldwide, will leave along with Group Chief Financial Officer Clive Standish.
Meanwhile,
rival bank Credit Suisse said it was also hit by the credit crunch, but that it would remain profitable in the third quarter.
It expects an income from continuing operations after tax of around 1.1 billion U-S dollars for its third quarter.
The bank declined to provide further details.
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Fraser Securities:
SINGAPORE MARKET
Sanity returns to market after August scare but could it be new insanity?
Najeeb Jarhom
It may be hard to see any major downswing after stock indices hit record highs so soon after the August market scare.
The reliable pattern of market behaviour in the past 4 years or so has been that once new peaks were recorded, the trend towards a series of new record highs will continue for as long as 3-5 months once the previous peak has been taken out.
The July 16 record peak of 3688 was broken only last Thursday and before anyone could catch his breath, the STI has leapt to a high of 3829.52 this morning, up 141 points, staging a series of breakouts on increasing volumes albeit less than the June-July record daily turnovers.
The scary feeling may not just apply when world markets underwent a shakeout in August led by Wall Street where triple digit plunges were the order of the day including Singapore, HK and Tokyo. But this time too, the most bullish forecaster would shudder to think of the potential record highs.
This is especially so as such targets set eg Hang Seng at 27000 and STI 3750-3800 have been easily demolished and higher targets above 4000 say 4200 for the STI no longer look far-fetched this year.
Just look back at the major peaks starting from the long standing January 2000 record of 2583 which was finally overcome in May 2006 with the new peak at 2666. The next peak was 3316 in February this year, a 650-point difference followed by the July peak of 3688, a 372 point gap. An STI of 4000- 4100 would mean a gap of 312-412 points from 3688, which does not seem to be a tall order and judging by the 4 month gap between the last 2 peaks, the 4000-4100 level could be seen sometime in January. But is the sub-prime crisis really over judging by the record highs set by the Dow and other major indices? On hindsight would the Fed had cut interest rates by 50 basis points just a fortnight ago if it knew Wall Street would break new records? Ostensibly the Fed’s move was to prevent a hard landing for the US economy but for market players it could have been interpreted to prevent further plunges on Wall Street. If the US economy gets back to its feet quickly and the sub-prime issue is out of the way which appears to be the message from Wall Street, then this rally can be sustainable. If not, we can expect a return to the wild volatility seen especially in August, but which had a progressively less bearish impact on Singapore.
The decoupling should continue especially with the euphoria surrounding China S-shares on Beijing’s relaxation of capital rules on overseas investments to take the heat out of their own Chinese megabull run. US fund managers may well be behind the latest surge in China plays to reap hefty capital gains to compensate for the weakening US dollar but to ensure this they may have to cash in early. So retail players should be cautious as these China plays could fizzle out quickly. It should be safer to stick to local big and mid cap stocks of which a list of about 20 was included in our Sept 20 report when the STI crossed 3600.
Labels: Trading Digest
About Me
For many years, I used to think that I am jinx to the stock market! Whatever counters I hold, they won't see the sunlight until I exited. I knew nothing about FA or TA. I bought based on tips given by brokers, relatives & friends. I must have lost more than $50K - $60K all these years. Each time, I only move in toward the end of the bull because that is the time where I am watching everyone else making money except me. The mentality of not wanting to be left out have prompted me to ask around for tips. But soon after I moved in, the party is over.
In early 2007, I decided that I should take trading more seriously. I attended a series of TA courses & seminars. I supplemented my learning through extensive self studies online. Although TA is never fool proof, I do feel that I am better equip to survive and trade the market. I am no longer a blind man to the stock market....
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This blog focuses on the Singapore Stock & Exchange ( FTSE STI )
Mimosa is a member of The Technical Analyst Society ( Singapore )
Mimosa has passed CFTe I exam conducted by IFTA
Disclaimer:
The contents in this blog are for educational purpose aimed at promoting technical analysis. Any buy, sell or other investment advice should be taken from this perspective. Mimosa is not responsible for any investment losses as a result of any reader following the buy/sell calls.
