SSE - Bearish since April 2010

There has been so many stories about China Economic growth powering world recovery. But looking at the SSE (Shanghai Stock Exchange Composite Index),the situation does not seem very encouraging.



It appears that the effect of the stimulus package that China had injected into her economy is waning off since mid to late April 2010. Since then, the stock market has been going through correction. The SSE has re-trace 61.8% of the run up from Nov 2008 low to Aug 2009 high. The rally from Nov 2008 to Aug 2009, we saw a 100% increase in the index.

By now, it has given up almost 2/3 of its gains. This is probably the most bearish index compared to Dow, S&P, Nasdaq, FTSE, Nikkei etc. So, how much faith do you want to put into the China growth story?



Dow has given up only about 30% of the gains from Mar 2009 low to Apr 2010 high. Does that mean that there are more to lose for Dow? When would the effect of stimulus package start waning? Will it give up another 30% of the gains few weeks down the road? What will US & Europe do to prop up the market?

SGX Weekly Review 090320

There has been many daily reviews and weekly reviews on Dow Jones, NASDAQ, S&P500, SPY, FLX, etc, etc. Just don't find any SGX reviews. So, it's time I do one. Hopefully, someone else will also start to do it.

Looking at the daily chart of FTSE STI, the comments are as follows:

On week ending 090313, we saw a strong rally that propelled the STI advancing more than 10% over the previous week. On week ending 090320, the STI still advancing but at the slower rate. The volume has also diminished slightly but does not seemed significant. MACD showing a little bit of topping sign and we may expect red charts appearing soon even though the signals still moving up. Stochastic reaching overbought on daily basis. I expect the market to further correct itself in the coming week but it does not mean that it will close lower. However, it is highly probable that it will touch 1560. If it close below 1560 for more than 2 consecutive sessions, it could indicate further decline. However, if it bounces up from there and proceed to close above 1600, it could lead to further rally to 1670.

Stock Price Movement - DBS

Revised Window Of Opportunity by Time Horizon (WOOTH) for DBS updated with price adjustment due to Rights Issue:


Today, DBS is trading in the "safe entry" zone below S$8.20. But due shooting star in the weeklya and daily charts, it would be prudent to wait and see before entering. See below for a chart done last week on 7th Jan 2009 night. Shooting star appeared on 7th Jan 2009 when I happened to look at DBS. On a weekly basis, the shooting star become more pronounced.



This was followed by 3 more down days. Expected to go to below 8.15 but stay above 8.00. If 8.00 broken, further support at 7.60.

Market Rally Up From Morning Low

The market seems to be rallying up from the morning low. I wasn't looking at the intra-day movement and sold off my NOL holdings at S$1.14 (bought at S$1.04). Since I am not a day trader (I am a Weekend Trader, remember?), I paid no heed to intra-day movements.

This counter showed weaknesses by having double down bars with second closing below the first. It is also scheduled to meet the 20MA. The 20MA is expected to provide some support. However, as I do not have good data for the WOOTH charting method, I decided to play it safe and took the depleted profit of $0.10 missing out the major part of $0.25. Since the major trend is still down, it has higher potential to turn down than up. Defensive play is the key now.

Both MACD and Stochastics are showing signs of down trend which also coincides with the price trend in the short term. I think I will wait and see how it perform over the next few trading sessions.

SGX Market is heading for correction again!

It seems that SGX Market is heading for correction again after some weak showing over the last 2 sessions. The major news is that DBS is raising fund again. This time, a total of S$4 billion. This is huge number by Singapore standard. It is equivalent to about S$900 per resident or S$2,700 per working adult assuming 1 in 3 in the population is working. In a weak market like this, a rush to raise capital is something worrying to me. I think the share price will move lower to even below $9 prior to adjustment or below $8 after adjustment. This is just based on gut feeling. No concrete calculation is done.

Note: Sold Capitaland at $3.18 yesterday in the early afternoon after looking at the market during the lunch hour. Took profit of $0.62 per share (24%). Based on my WOOTH, the good and safe entry price should be $2.40. However, this counter is strongly supported and the largest counter in property sector (as in SingTel), it commands some additional premium (I guess). You see very strong support at S$2.50 ~ S$2.60 level. So, entering around that level is quite safe.

Missed out NOL when it was $1.28~$1.32. Was not able to sell due to work commitment and not watching closely enough. Seems like Weekend Trading method is not easy. However, still holding on to the paper gain of S$0.12 per share instead of S$0.30 per share. I hesitated earlier and it when down, boom, boom, boom.

Current holdings:

STOCK NAME	AVE COST PRICE	LAST DONE PRICE	+/-	+/-%
COMFORTDELGRO	1.49	1.38	-0.11	-7.38
NOL LTD	1.04	1.16	0.12	11.54
SING TEL	2.3	2.55	0.25	10.87
ST ENGG	3.18	2.29	-0.89	-27.9

NOTE: I had to batches of SingTel. First batch was bought at 3.67 and second at 2.30 with equal volume. I sold half at 2.48. The system uses FIFO, so it assume I sold off the first batch and took a loss of 1.19 (heavy losses). Actually, I meant to treat the 2.30 batch as short term trade.

Stock Analysis using WOOTH method

ST Engg:
ST Engineering used to be called the defensive stock. However, under this down turn, it is not spared. Looking at the history more closely, one can realize that it did badly during the previous recession. The so called defensive by analyst is totally unfit.



SingTel:
SingTel is another defensive stock by analysts. Again, looking more closely at the past recession, it becomes obvious that this stock is highly correlated to overall economic cycle. It is not defensive as it is perceived by analysts.

SGX - Stock Market Direction - short term bullish

Sold DBS just now for 9.64 'cos I think the chart seems to turn bearish (bought at 9.08). Took profit. I think it may go below 9.30.
Hold ComfortDelgro (bought at 1.49) chart seems to turn bullish. Higher lows and higher highs. Above 20MA & 50MA.
Hold Capitaland (bought at 2.56 ave) chart seems still bullish. Above 20MA & 50MA.
Hold NOL (b 1.04). Bullish. Above 20MA & 50MA. 50MA seems to be strong resistance. Just above 50MA. See if it holds.
Hold ST Engg. (b 3.175). Lower highs. Above 20MA & 50MA. Entered too early.
Hold SingTel (b 3.67). Higher highs & higher lows. Above 20MA & 50MA. Bullish in near term.

Market heading for a strong rally

With the positive news that the developed nations are acting together to avoid the major financial melt down, the global stock market is heading for a strong rally. The STI is showing strength in the surge yesterday.



This is probably the strongest one-day rally we had ever seen. Today, it maybe more buying as US and European markets all showed strength last night. Expected to rally for a period of 4-6 weeks before seeing next wave down. There will be a mad rush to buy this week. That may push the index up by another 200 points before investors start thinking again.

Singapore Stock Market Trend: Not bottom yet

In line with the Dow Jones and S&P500, the STI is showing no signs of bottoming. Looking at the various levels of support and resistance, we can only conclude that there is more down side. So far, the volume does not show any sign of panic selling, unlike 1998 or 2001 or even March 2008. The current down trend seems to be slow and steady. In that sense, we will have to wait for the slow turn around as well. We should not expect quick bottoming even if the US$700 bail out plan (or buy out plan as some would like to call it) is approved.

Here is the STI chart.


There seems to be some divergence from the indicators which may signal some short term rebounce. Nothing is indicative of any sustainable rally coming (talking about sustainable for a for over 3 months). The market can stay oversold for quite a while.

Jaya Holding - Not best time yet

This is a counter that has enjoyed super bull run for 5 years with price change from the region of $0.25 all the way to over $2.00. The gain of about 800% in 5 years. Those who had invested in between 2002 and 2003 and hold on until 2007 would have been rich.

Anyway, no point on the hind sight. What is important is that the trend is still down and not matured for accumulation yet. Too risky to go in now.

Keppel Corp - Not Ready to accumulate

Keppel Corp is continuing the down trend. One of the main reason is the overall industry outlook. The demand for oil rig construction is expected to shrink and some of its competitors are facing order cancellation. This certainly puts pressure on KepCorp price. Currently, it is trading in a down trend channel.


With the current uncertainty, the prices is expected trend down further. Even if there is a rescue package (which should be one), the price may bounce back and trend down again. Good position to accumulate would be somewhere around $6.00 to $7.00.

Venture Technical Analysis - Down trend

Continued from 2 weeks ago, Venture bounces of the 20MA and resume its down trend. Overall market condition is still no good for consumer electronics. With the threat of recession, it may not see any near term turn around. However, the US bail out which should be passed soon, will provide some relief to the counter. It may break the 20MA and meet the 50MA. However, this will be short lived as longer term trend should still favors downward movement.


Snapshot of Venture Corp's chart as of 26th September 2008. There is indication of over sold and potential for some short term bounce. However, any trade into this should be short and quick.

Stock Market Major Trend is Still Down

Yesterday, Dow Jones and S&P gave up all their gains since the rescue of Freddie Mac and Fannie Mae due to the uncertainty facing Lehman Brothers. The market experience continuing selling pressure until near towards closing. This morning, STI followed and give away over 3.1% to close at 2541.  At the rate it is going, I won't be surprise if it hit below 2000.

Market is expecting more troubles to come and Merryll Lynch has been siad to be next in sight. With such market sentiment, it would be safer to stay at the side line for long term investors. This is a day-Traders'  environment. You need to be fast and nimble. No time for careful thinking if you are playing the market now.

Today, I am expecting US market to have some further selling.

STI Market Direction in near Term

After the rally from the rescue of Freddie Mac and Fannie Mae, can the market sustain the up trend or will it succumb to the general market down trend again?

Stock Market Review - Has the market bottom out?

This is a billion dollar question!

If you are sure that the market has bottom, what would you do? Of course buy big time and wait for it to recover. What if it takes another 5 years to recover? Are you able to wait for so long? In the end of the day, investing is about ability to hold it out. If you are only looking at 3 months or 12 months time frame, then, it will be speculating on short economic cycles and a lot of risk is involved.

When the market is on a down trend, it tends to be extremely volatile. Price swing is much large than in the uptrend. You need to be able to take the fluctuation in good strike and be confident in your decisions.

According to Ben Graham, one must be able to take the down swing of up to 33% in order to be able to consider yourself an investor. If you are think of entering at the bottom of the market and trying to sell at the peak of the market, chances are that you will miss both by a lot.

Stock Trading Commandments

Never Turn Trades into Investment

When the market move against you, cut loss. When the you get it right, take profit. Don't be greedy. You won't know when it will turn.

Your First Loss Is Your Best Loss

When you trade turn awry, cut loss fast. The subsequent loss is likely to be more severe.

It Is OK To Take Loss When You Already Have One

Losses, realized or unrealized, are actual losses. Unrealized losses if not taken, may lead to bigger losses.

Never Turn a Trade Gain Into Investment

Do not be too greedy. Know when to get out. Market can turn anytime.

Tips Are For Waiters

Don't be fooled by hot tips.

You Don't Have a Profit Until You Sell (Close the Trade)

Paper gains can be wiped out when market swings.

Control Losses: Winners Take Care of Themselves

It is more important to pay more attention to losing trade and limit the losses. You don't have to worry too much for the winners.

Don't Fear Missing Anything

The opportunities will come again. Don't chase the price.

Don't Trade Headlines

News headlines are too brief and inaccurate. They just want to get it out quick. Read into details. The stock will not fly away.

Don't Trade Flow

Don't buy just because someone is trying to sell you and you think it is convenient. Do research before you buy anything.

Has the market bottom out yet?

Many investors like to use the term "bottom fishing" to describe their action in bargain hunting for under valued stocks. In essence, what they are doing is to try to catch bottom. However, for many experienced traders, catching bottom is a dangerous action. Here is why:

Market bottom is a process, not an event.

Why you can't catch the bottom. For investors, your only choice is to buy stocks on the uptrend, not downtrend. Let other people find the bottom for you. Just sit back and watch them fight it out. Conserve your capital and avoid taking unnecessary risks.

Just look at the mistake I made on Chip Eng Seng. I thought when the price dropped from over $1.10 to $0.83, it was a good time to enter. In the end I had to cut loss at 0.59 (yet another mistake for not sticking to my rules of cutting loss at $0.75). During the market crash, the sell down can be fast and furious. If you are not in front of the screen, you will be caught dead. Yes, I was on a consulting project during the period and when I look at it, it was already hitting $0.60. So, the notion of buy-and-keep is not always the best approach. As you can see, this counter has gone down from peak of $1.10 to $0.49 (more than 50% off) and yet still bottom is not in sight.

Chip Eng Seng Update 2

Chip Eng Seng went on to close at 0.49 yesterday. In general construction counters continue to show weaknesses. This is due to a few reasons. One, the real estate market is cooling off faster than expected. Nothing new, I was caught off guard 10 years ago resulting over half million dollars loses.
Two, material costs is sky rocketing. Three, new projects are not coming. All the fads built into the prices has to reverse out. Fall out from US sub-prime saga.

I am expecting these counters to go down further in the mid term. With the overall market bear trend continuing, the bottom is not in sight yet. However, there might be some short re-bounce due to bargain hunting at highly oversold region. If it breaks 0.47, it should further test 0.42 and 0.30.

Singapore Stocks - Chip Eng Seng

Singapore Stocks Analysis - Chip Eng Seng
Chip Eng Seng - Construction. Analysed on 02/Oct/2007. Entered at 0.825 on 03/Oct/2007. Pulled back to 0.805 on the same day. Recovered to 0.825 on 04/Oct/2007.

Closed at 0.87 on 05/10/2007 Friday. Expected pull back on Monday (8/Oct/2007) to 0.85 or even to 0.84 during intra-day. Should close above 0.855 on Monday. Will average up between 0.85~0.87. Expected to test 0.90 with 5 trading sessions and test 1.00 with 4 weeks.

ComfortDelgro - waiting for direction

Singapore Stock Market



ComfortDelgro - Waiting for direction.

There seems to be a large triangle formation and Boillinger squeeze. This counter is waiting for the market to give a direction. Based on the current trend, there is potential change of trend soon.

Both RSI and MACD are indicating potential uptrend. This is a blue chip that is lagging behind. Soon enough, it will catch attention and start moving. Watch closely and prepare to enter between 1.96 ~ 2.00. No negative news associated so far. Should test 2.16 and 2.44 in 4 weeks.