November 5, 2009 • 12:32 am
[No Charts Available for the day]
After much blood letting, stochastics are beginning to turn up.
GMMA shows that the long term moving averages are giving good support at 2620, which coincides with the support line at 2620.
The 2620 level has proven resilient and came dangerously close to breaking it 2 days ago.
Talks of a double dip recession coming does not seem to justify the charts. Charts shows the real thing and talks are cheap.
On the global front, despite the whipsaws seen in the US market for the past 2 weeks, the Dow Jones is still trending up.
Shanghai Composite Index has already broken its short term downtrend, and is ready to resume its uptrend.
Based on the experiences of this rally, the China market is a very good leading indicator for the rest of the Asian markets.
Commodity Index is also touching their uptrend line and resuming their rally.
STI charts shows that this is still an oscillating market, a phase of consolidation, where boys and girls get spooked by Halloween tales.
Weak bulls are out, new bulls are in and frightened bears covering their shorts. With each dip, the bulls will come back stronger.
Filed under: Technical , STI
October 23, 2009 • 9:54 pm
Noble 23rd October 2009
Noble Group’s financing has seen 63 banks joining in. What this means is anybody’s guess. The best evidence is in the charts :
1. It has been on the uptrend since March, as evident from its straight uptrend line.
2. GMMA shows healthy moving average band seperation, meaning the uptrend is very well intact and no bubble has been formed yet.
3. Broke all time high of $2.69 on high volume.
Traders and investors can look to enter with a stop loss at $2.67, just slightly below the new support and at the base of the upmove for today.
Filed under: Technical
October 15, 2009 • 12:28 am
STI 14th October 2009
A new leg of rally is believed to have started today.
Previous 52 week high of 2707 that occured on 9th October 2009 has been broken. Even on that day, the index ended down 2682.
Today’s rally see the index surged 40 pts and closed at 2708, on higher volume than the past 3 days.
Investors entering tomorrow can still catch onto the rally relatively early. Some support can be found at 2680.
On an individual stock selection basis, investors can look at index component stocks with a focus on commodities.
Commodities index Reuters/Jeffries CRB is showing a bullish flag with high possibility of a breakout.
Olam and Noble Group should satisfy both of these criteria.
Filed under: 1 , Noble Group, Olam, STI
October 4, 2009 • 2:28 pm
STI 2nd October 2009
STI gapped down significantly on Friday, breaking support of 2622 in the process.
GMMA short term moving averages has started to touch the long term moving averages.
Stochastic shows a bearish divergence as far as 7 sessions back.
On the back of current weakness, STI should test be testing the next support level at 2560.
Look to sell on strength and wait for clearer signal before entering again.
Shanghai Composite Index 30th October 2009
Another reason to wait on the sidelines is given by the fact that Shanghai Composite Index is showing extremely bearish chart patterns :
1. a double top has already formed, with the second peak significantly lower than the first. These 2 peaks formed the down trendline for the basis of testing if the down trend is over.
2. If the Shanghai Composite Index falls further, a head and shoulder pattern will be formed on its second peak, another bearish chart pattern.
3. GMMA is clearly showing a downtrend with extremely compressed long term moving averages above the short term moving averages.
4. -DI is above +DI, with ADX gaining strength, indicating that the downtrend is gaining momentum.
As with the recent rally, the Shanghai Composite Index is the market leader in the recent decline. If there is anything to go by, the rest of the market should follow suit, and further downside is highly likely.
Investors and traders should consider biting the bullet and start to cut loss. Wait out when the sell down is over before establishing new positions.
Filed under: 1
September 23, 2009 • 12:06 am
STI 22nd September 2009
STI’s rally today is broad based and late buying has pushed it to close at its highest since the rally in March.
The bullish flag formed by the uptrend line and resistance line continues to narrow the trading range. Today’s rally might have some positive implication. It is likely that the bull has already won the tug of war.
2703 resistance level is going to be tested for another time.
GMMA shows that there are no crossovers, meaning the trend is still healthy.
Filed under: Technical , STI
September 13, 2009 • 11:34 am
The typical “investors” will adopt a buy and hold strategy. Such a strategy develops because from literature and common speak, “investors” are seen as having little involvement in the market after having done their “research”. On top of that, from some other sources, Technical Analysis is often frowned upon because it is often associated with intraday traders, quick and dirty money, complex, unreliable and bankruptcy in the end.
These 2 main misconceptions and misinformation has led many people to adopt extreme ends of fundamental analysis and technical analysis. Usually it is the former. “Investors” adopting the buy and hold strategy are usually “losers” with no sell strategy. The main purpose of being in the market is to make money. Without a sell strategy, the “loser” usually sells when their investments shows a fundamental change, which usually is known after their investment has shown a loss.
Fundamental analysis is ideal for stock picking, but take those research material with a pinch of salt. Technical analysis is still needed to verify that the stock is moving. Likewise, technical analysis is also needed to inform the investor that the stock has stopped moving for the long term. It is only this way that the long term investor is able to cash out before the investment becomes a liability.
Technical Analysis need not be complex. The complexity is often increased with increased usage of indicators and constant switching between them. Technical analysis can be simple if one limits to not more than 5. Personally I will recommend at most 3 that you are most comfortable with and master them. Simple charting like trendline drawing, identification of support and resistance level is more than enough for the average investors.
Technical Analysis need not be for the short haul and can be used for medium to long term. Whether it is short term depends on whether the stock is a good trending stock. If a stock oscillates, using Technical Analysis will certainly give alot of buy and sell signals. A good trending stock will usually dip very little in a market correction. Therefore investors should do a final round of filtering based on their trend. Once the trend ends, investors should just cash out.
Filed under: Thots
STI 11th Sep 2009
From price movement alone in the past 2 sessions, STI has been in a constant tug of war at both ends between the bulls and bears. Let’s take a closer look using Technical Analysis.
Short term downtrend has been broken by the gap up 2 sessions ago. Past 2 sessions has seen it closed below opening price. Despite this, it is still holding well above the previous closing high of 2680.
The gap up 2 session ago was accompanied by high volume. GMMA also shows healthy development of trend. +DI and -DI are showing increasing divergence and ADX has cut -DI and started to turn up, showing further sign that the trend is gaining strength.
Seems like for now, the bets are on the bulls. Once all the bears have exited, STI should resume its charge. This should hasten if Shanghai and DJIA continues to rise. Shanghai Composite Index short term moving averages have touched the long term moving averages. If a cross over occur, Shanghai Composite Index should recover from its correction. DJIA has managed to close above 9600 despite its fall below 9600 during intrday on Friday.
Next week should be interesting. STI should be able to power forward if the global market rally together.
Filed under: Technical , STI
September 9, 2009 • 1:35 am
Today marks the 4th day of rise for the STI, again, brought about by late buying. Volume has picked up. Property has been giving the STI a good push. Commodities stocks have staged a rebound of sorts today. Something good seems to be brewing. There is a feeling that this September might not be the same. One thing to note is that STI is still below short term downtrend line.
Filed under: Technical , STI
September 8, 2009 • 2:37 am
STI 7th Sep 2009
STI will be trying to break its recent high for the 3rd time in the coming sessions.
Long term trendline looks intact and is well supported at 2567.
The short term downtrend line is not steep and looks almost horizontal, forming a bullish flag of sorts.
3 white candle days seems to bode well too, although volume has been falling.
GMMA shows trend is still healthy, with the green lines well seperated, showing little compression.
Conservative traders can wait for the downtrend line to be broken before entering.
For those who have entered, be well prepared with a stop loss.
Filed under: Technical
September 2, 2009 • 12:49 am
For 2 consecutive days, STI has closed down after running higher. This could be sign of profit taking. It is hovering near support. Any upside is limited, short of breaking the resistance which is increasingly unlikely. Take profit or cut loss if one has yet to. Some support can be found at 2544. Looks like the correction since early August has yet to run its full course. Better to keep cash on the sidelines when the signals are clearer.
Filed under: Technical , STI
