Mimosa Trading Diary

Straits Times Index

2009-11-11T18:11:00.009+08:00

As evident by the much fewer posts I have made lately, I have been very busy engaging in a project.

Contrary to the pessimists who have called for a market top for weeks, STI closed 1 point above the last significant high of 2,739 ( October 15 ). What is interesting is that one of my trading systems has shown a buy signal yesterday and the signal was triggered today:

After closing higher three days in a row, it is reasonable to expect some profit taking especially where the index is touching the trendline resistance. Regardless of whether the profit taking, will take place tomorrow or slightly later, we need to watch whether STI is able to break the upper trendline decisively. I am still apprehensive on whether the two converging trendline is a ascending triangle or a rising wedge!

SGX & ST Eng Updates

2009-11-03T18:45:00.006+08:00

SGX did not give us the confirmation we need for the reversal. The doji at star position spotted yesterday was near ideal but market decides otherwise. SGX has been viewed as the barometer or leading indicator of the Straits Times Index. It has been traded below 50 days simple moving average for a while and right now refused to confirm the doji star and touching the down trendline. We need to watch carefully will it be breaking the down trendline in the near future. If the down trendline is broken, it is wise to stay defensive in line with the Elliot Wave count.

ST Eng did break out of the bull flag today.

CapitaComm

2009-11-03T13:12:00.001+08:00

I agreed there is a buy trigger at $1.08 today, targets $1.17. If able to break $1.20, can look forward to $1.28 ~ $1.30.

ST Eng

2009-11-02T21:46:00.002+08:00

There seems to be a bull flag chart pattern as shown. If prices break above $2.93, the bull flag is probably valid. The Ascending Triangle in the chart was first spotted on Sept 8....
As usual, a chart pattern is not valid until it has successfully broken out !

SGX

2009-11-02T21:26:00.002+08:00

I always like this type of candle after a prolong uptrend or downtrend. Although not infallible, it is giving hope of a reversal. Confirmation is needed .....

Reversal In Progress (UOBKH)

2009-11-02T16:48:00.006+08:00

Something new show up in my Elliot Wave chart today. The numbers 3, 4 & 5 are the target ( if my chart is correct ) :

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The below is from UOB Kayhian. They have moved their research report link to the client area only assessable by clients. So I thought it is useful to post a copy here:

Technical Analysis

Reversal in progress - UOB Kayhian
The pullback in equity markets should not come as a surprise to investors. We had been warning for some time that equity markets were showing clear signs of top formation. For the US, we had stated the DJIA was expected to trace out in a rising wedge formation and suggested a move towards 10,000 as the final 5th wave of the wedge formation. That has materialised and the index has also broken out of the wedge formation. There is an early indication that the uptrend from Mar 09 has now ended. Pullbacks from rising wedge formations should be swift and we estimate significant support at about 9300- 9340, a 38% retracement zone.
We had also opined that the FSSTI was likely to head towards 2,730 in an anemic breakout and then swiftly retrace. That has also materialised with the index heading to 2,739 and swiftly retracing. We now expect the index to head towards 2,480-2,500 before a minor rebound sets in.

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I will post my own analysis & view separately !

Volatility Returned

2009-11-01T16:02:00.013+08:00

Dow Jones Industrial Average:

Volatility returned to the Wall Street ! Dow lost 249 points on Friday and closed October with a Doji candlestick signaling indecision.

The long term up trendline is still intact but we are getting too close to the trendline for comfort. Chances are the pull back from 10,157 on Oct 20 to Friday intra-day low of 9,664 is a healthy retracement but if the up trendline breaks then we can expect 9,400 next.

Straits Times Index:
On October 15, STI broke the resistance at 2,707 and hit a high of 2,739. Unfortunately, it has immediately fallen back to the trading range. Similar as Dow, October monthly candle was a Doji signaling indecision.

The symmetrical triangle that I have suspected appear to turn into a bearish wedge instead. With Dow losing 249 points, I can't think of any reason where we could avoid a blood shed tomorrow. Immediate support is 2,605 and 2,575.

What Happen To STI ?

2009-10-20T20:09:00.005+08:00

Dow was up 96 points, Hang Seng was up 184 points, Nikkei up 100 points and SSE up 46 points. Why was STI downed 0.61 points?
As explained by one of my remisiers, it is mainly due to the strong SGD that is pushing funds to the sidelines. From a fund point of view, they rather offload the Singapore stocks at this current level (SGD vs USD) and opt to hold onto cash, ready to shift back to USD rather than continue to buy the Singapore market up.

Straits Times Index

2009-10-14T20:21:00.008+08:00

STI has returned to retest 2,700 ~ 2,707 and closed 1 point higher ( 2,708 ). One point gain is not high enough to draw the conclusion it has successfully broken the tough resistance built up since Aug 4.

Tomorrow will be a crucial day ! A decisive close above 2,708 will signal further upside to 2,800~2,900. The psychology behind this is simple. There are a lot of traders waiting at the sidelines since Aug 4 because they are worried about market topping. If STI is able to break 2,708 decisively. They will be convinced the market is going to head higher and generate renewed buying interest.

On the flip side, we will see STI returns to the trading range again. UOB Kayhian is extremely bearish about STI. In their report dated Oct 12, they tipped STI to cap at 2,710 and downside to 2,200.

The closing today has caused my Elliot Wave chart to recount ( again... and again.... ). Wave 5 has once again been pushed back so wherever it is going to terminate we will still see the correction we anticipated for 6~8 weeks to take place.

DJIA HIts Resistance

2009-10-13T20:36:00.008+08:00

Dow retested the resistance at 9,937 but fall back quickly from the intra-day high of 9,978 to close at 9,885. The failure to close beyond the last significant high could signal a near term weakness. The long legged spinning top candle seems to suggest a 'rejection' to rally higher.

I could be wrong but this is how I interpret from the chart !

My mobile phone continued to be flooded with SMS on penny stock calls. The latest was Beng Kuang ....

The STI chart is not as clear as the DJIA chart. But I continued to suspect there is a probable Ascending Triangle being developed, which has a bullish implication. Has the long awaited retracement of 38% or so compromised by the sideways consolidation? Before I am certain of which way the market is going, I remain defensive in my action.

DJIA Near Resistance

2009-10-11T11:55:00.009+08:00

The local market continued to move sideways and dominated by penny stocks. The top active counters become more and more niche lately! Ying Li, Ramba, ZWO, EcoWise, Seroja....etc. are among stocks that steal the limelight. I am not sure about you, but I have not heard of them before. I am apprehensive to chase them ( despite that these are the counters recommended by my remisier in the daily SMS ) because I worry as soon as I enter the party is over and I will be stuck with them forever. But if you are fine with that, these are the counters you can make some quick money. Just browse through the top volume counters each day and pick anyone that you have not heard before but are climbing, no need technical analysis !

DJIA is near resistance now. We need to watch closely how it reacts to the last significant high at 9,937. Failing to break beyond may cause the index to retrace back to 9.635 and 9.450. If it is able to break 9.937 decisively, we may look forward to 10,800 before year end.

For STI, many chartists have expressed concern that the sideways movement appears to have shown a series of lower peaks & troughs ( lower high, lower low ). I shared the same concern but on the other hand I noticed the Kagi chart seems to provide a glimpse of light! Kagi is showing an impending breakout ( buy signal ) should STI is able to edge up slightly more.

China XLX Update

2009-10-05T18:31:00.004+08:00

In my post dated Sept 21 ( here ), I speculated that a probable H&S is forming. Since then, I did not look at this counter until today. I am shocked to see that prices filled up nicely the channel lines I have drawn!

DJIA Update (Oct 4)

2009-10-04T14:34:00.004+08:00

This is the exact same chart I used on Sept 25. As predicted, Dow has finally touched the thick black trendline after losing 302 points in 4 straight sessions. Friday's closing was supported by the thick black trendline with a long legged doji at star position. I believed in the near term, it may bounce back to 9,650. Intermediate term still look bearish to me.

[Update] I have retracted my post on TechOil&Gas because it seems the trigger will never take place. Now that 40SMA was penetrated. The swing trade setup is destory.

Mapletree Logistic

2009-09-28T15:40:00.014+08:00

[Mapletree Logistic]
[Sept 28] Sold 2/3 of my holding today at .775. Guess what!? I accidentally keyed in the order as .755 instead of .775 and it was 'done' ! Fortunately, CFD Trader works in such a way that the executed price is at the market price so my order was filled at .775 despite the mistake!
[Sept 30 Update] Sold the remaining 1/3 at .775 too yesterday.

DJIA Update

2009-09-25T11:44:00.007+08:00

Dow lost 120 points in two days. The closing last night was supported by the two trendlines in thick blue. There might be a short term technical rebound but I think the 120 points loss has not fully addressed the RSI divergence. After the rebound, they may head lower to touch the thick black trendline ( or there may not even be a rebound ). What I am trying to say is that the thick black trendline looks set to be the mid term support and the thin blue trendline is the longer term support.

DJIA Divergence

2009-09-23T19:55:00.009+08:00

Dow Jones Industrial Average ( DJIA ) is currently at resistance. RSI shows clear sign of bearish divergence ( the two black lines ).

Counters Update:
Mapletree logistic - breakout from the flag today but the breakout was not strong and volume was low.

The charts below were done for a friend Sandra on her request. I thought since I have them, I might as well post them here along with my commentary by verbatim:

Ezion:
Completed the consolidation phase and breakout today with high volume. More upside can be expected…..This is the most bullish of the three counters with strong trend.
I took a glance at the chart after reading your e-mail this morning. I thought it is going to move today and queued for 20 lots at 0.80. But I was very stubborn and refused to give in to half a cent more and didn't get it ! For half a cent, I missed the big move to .86.

HongKong Land:
Some warning signs spotted. RSI bearish divergence and there seem to be a rising wedge chart pattern. Rising wedge in an uptrend has bearish implication.

CDL Trust:
The trend is still strong but there is some warning signs for the near term move. RSI shows clear sign of bearish divergence, Parabolic SAR is accelerating and will catch up with prices soon. Near term upside is limited, cap at $1.6. Then there should be some pull back … and after that should retest $1.6 and $1.78.

Mapletree Logistic

2009-09-22T10:17:00.003+08:00

Broker call. Look like a flag pattern forming to me.

STI - Conflicting Signals

2009-09-21T18:58:00.007+08:00

I am reluctant to post the chart below, which suggest that there might be an Ascending Triangle forming. An A-Triangle is usually a continuation pattern that has bullish implication. Volume wise it is definitely not perfect textbook model so this may cast doubt on the potency. If, however, it is valid. The breakout target based on the pattern shown is 2,950.
The reason I am reluctant to post the chart is because I have been bearish about the market based on Elliot Wave count. I have been anticipating for a moderate correction to 2,250. So there is a conflict right now on which signal to believe - the Wave Theory or Classical Technical Analysis.
I will be watching closely on how STI is to resolve the major resistance at 2,700. This will give us clue on which way it is taking ! For now, I am bearish bias and tends to think that the A-Triangle is not real ( because many of the bluechips, such as Yanlord / Capland...etc. are showing bearish signs anyway ).

Capitaland

2009-09-21T15:55:00.008+08:00

Capitaland has violated the up trendline on last Friday. The closing was supported by the 100 days moving average and the last significant low at $3.65. The trendline was violated by $0.05 or 1.4% of the stock price, not large enough to call it a decisive breakdown. Furthermore, $3.65 has been traded actively ( ie: with higher than usual daily volume ) and served as a strong support the past two weeks. OBOS indicators are showing sign of oversold. So perhaps it is too early to conclude the breaking of the up trendline on last Friday will immediately bring prices down to the next two supports. We may need to apply the two days rule to watch it for one more day and see if it bounce off from $3.65....
PS: Turtle System sell short trigger at $3.62 ( source, HC )

China XLX

2009-09-21T15:17:00.005+08:00

Another probable case of Head & Shoulder chart pattern. Remember, the key word here is "probable". A chart pattern is not valid UNTIL it is completed, usually when a major trendline is broken ( in this case the neckline ). If prices bounce off the neckline and never look back, than this particular recognition is false. The downside target is $0.39 if the pattern is correct. Apart from the pattern, I did examine the volume. Volume in the case of XLX is even more ideal than Yanlord to match the H&S pattern.
Actually, I did not purposely try to spot for bearish pattern. I was trying to look for bullish stocks but unfortunately after reviewing several counters, they all end up to have bearish signs...

Yanlord

2009-09-21T14:39:00.005+08:00

Yanlord appears to be forming a Head & Shoulder pattern. The pattern is confirmed ONLY IF the neckline at $2.2 is broken decisively ( ie: by 2~3% ). Once the pattern is completed, downside target is around $1.51. Incidentally, $1.51 is exactly Fibo 61.8% retracement from Aug 5 high to Mar 3 low.

Market View

2009-09-17T20:59:00.005+08:00

Near term :
May retest and break 2,707 to complete the wave count but upside is limited, cap at 2,760.
Intermediate term:
Bearish, heading toward a moderately deep correction of at least 38.2%.
Long term:
Bullish

Admittedly, the call for such a correction has already overdue. But I will continue to stay defensive rather than to be sorry!

Longcheer - Flag Pattern Breakout?

2009-09-15T10:15:00.002+08:00

If the breakout is real, target will be $0.76.

IndoAgri, Cosco & ST Eng

2009-09-08T21:18:00.005+08:00

Spotted three charts patterns yesterday :
IndoAgri - breakout at $1.68 did occurs ( vested ! )
Cosco - Awaiting breakout at $1.32
ST Eng - A perfect Ascending Triangle except that volume did not contract per textbook model

On Blog Leave

2009-09-03T20:43:00.005+08:00

I received a few e-mails today asking me why my blog is locked suddenly where access is "by invitation only". I thought maybe I should make a short note here:
With CFTe level II exam just around the corner. I wanted to take a short break from blogging so that I can concentrate in my preparation. I will be flooding my blog with academic stuff such as the two posts below which are essay I have prepared as answers for the papers. Since these are my own works not related to the market, I thought I should keep it to myself for now. I will resume blogging at a later stage, so do check back....

PS: Anyone wish to keep in touch with me, my e-mail: mimosa_view@yahoo.com.sg