Sector Review

January 29, 2010 § Leave a comment

After every correction, market leaders changes.

It is usually helpful to start from a sector’s point of view before zooming into individual stocks.

My usual favourites are the shipping and commodities sectors. They are easily tracked by global indices.

For shipping, it will be the Baltic Dry Index. For commodities, it will be the Reuters Jeffries CRB. Properties will be difficult as I have yet to find one.

Baltic Dry Index 27th Jan 2010

The BDI is finding good support at the 3000 level and is still trending up, despite stochastic already fallen to oversold levels.

This is a sign of strength in the shipping industries.

Reuters Jeffries CRB 27th Jan 2010

In comparison, the Reuters Jeffries CRB is showing signs of weakness.

The index has fallen past 2 support levels, broken the trendline and looks like a head and shoulder pattern could materialize.

Stochastics has fallen to oversold levels. The strength of the rebound will determine how well the commodities sector will fair.

Hence, in comparison, the shipping sector is showing great resilience in the recent global sell off.

On a stock by stock basis, NOL seems to be the stronger counter over Cosco.

NOL 28th Jan 2010

Support can be found at $1.7. Uptrend is still intact. Stochastic is starting to crossover.

There are signs of a pickup in volume again.

Cosco 28th Jan 2010

Cosco, in comparison, stochastic is still falling. It will take a few more sessions before a clearer base can be formed.

Uptrend should still be valid, though drawing the trendline will proved to be more difficult at this stage.

Support can be found at $1.24

Wrong Again!

January 28, 2010 § Leave a comment

Another round of beating.

Looks like it is time to wait on the sidelines and wait for a clearer picture to manifest.

Fast n Furious

January 26, 2010 § Leave a comment

STI 26th Jan 2010

Today’s drop in the global market came unexpectedly fast.

STI broke resistance level of 2808 and fell sharply to close near the next support level of 2740.

The trend line is still valid in providing support at this level.

Oversold Stochastic has flattened and may turn higher as a crossover between the fast and slow stochastics occur.

It would be unadvisable to sell near current level as a technical rebound is imminent.

Again, cut loss if STI closes below 2740.

STI Oversold

January 25, 2010 § Leave a comment

STI 25th Jan 2010

There are encouraging signs in the past 2 sessions despite the dip.

The gapping down in the opening of both sessions, we see bargain hunting caused the STI to close up significantly higher.

Support is showing superb strength at 2808 ever since clearing it during December.

Although the long term trendline has been broken, the medium term trendline is holding quite well.

Coincidentally, the medium term trendline has intersected the 2808 support level, further fortifying the support.

GMMA crossover has occured and Stochastics is already in an oversold region.

Assuming uptrend is still valid (based on the 2808 support level and medium term trendline), Stochastics should recover quickly in an uptrend.

Hence, it is unlikely GMMA will start to give a bearish signal.

In the event that all else fails, cut loss when STI closes below 2808.

At the moment this looks unlikely as the global market is likely to rise in tandem from oversold levels.

The US Dollar

January 22, 2010 § Leave a comment

US Dollar 20th Jan 2010

It is believed that the US Dollar is in the early stages of a trend reversal.

Between November and December, a bullish divergence chart pattern has been formed between the price and stochastics.

Prices in December has fallen to a recent low, but stochastics is actually turning up higher. This is an extremely bullish signal.

What follows was a significant run up in price before pulling back for a temporary correction.

The correction formed a base for the plotting of the new uptrend line, coincidentally forming a penant which is the basis for the recent rally breakout.

The correction can be seen as a handle in the cup and handle chart pattern, which is again a very bullish signal.

US denominated stocks and ETFs should greatly benefit from this trend reversal.

Parkway Finds Support on the Way Down

January 19, 2010 § Leave a comment

Parkway 19th Jan 2010

After falling continuously for 6 sessions, Parkway’s stochastic has reached oversold levels.

Today it staged a technical rebound.

However, a few points from the charts in indicators will show that this is more than just a temporary rebound :

1. Price level recovered when it touched its long term trendline.

2. Price recovered quickly when it hit below the strong support level of $2.89

3. GMMA has just touched the long term moving averages. And if points 1 and 2 are valid, it is unlikely that a crossover between the short term and long term averages will occur.

4. Going forward, if  price continues to hold for the next few session, the $2.89 support level will become stronger as it will be supported by the trendline as well, not to mention the GMMA too.

Hence, coupled with such technical evidence, it is highly unlikely that Parkway should find further down side.

Of course, always cut loss if $2.89 breaks again.

SembMarine Recovering Lost Grounds

January 19, 2010 § Leave a comment

SembMarine 18th Jan 2010

SembMarine, after flirting close to the uptrend line, has recovered strongly to end above previous breakout level of $3.72.

The move lacks much conviction because of the low volume and stochastic that is still turning down.

Trendline should still provide good support, though short term moving averages have already converged.

More validation is required before jumping in.

Wait for stochastics to turn up and short term moving averages to seperate.

Coincidently, a breakout may happen because of the pennant formation.

If prices continue to hold and uptrend continues to remain valid, $3.72 will be a stronger support level.

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