Tuesday, September 06, 2005

Resistance stayed Resilent

Resistance touched and bounced as feared. Market did not know which direction to head and alas gravity pulls it down to close in negative territory. Market opened with so much optimism, especially in Marine sector. But by noon, upper shadows beginning to show. Much of my "leading stocks" end up at resistance or below, unable to break resistance is not a good news. Unless all the resistance are broken with volume, otherwise staying cautious can save u some money. Don't lose unneccessary. However I must mention, again when STI drop, the volume and value is smaller than when it rallies.

Another thought gone through my head as I stared blankly into the night....what are technical indicators. How useful are they? I noticed, ever since i started to abandon them, i beginning to trade better. This coincide with my style being forced to make lesser trade as my current trading system do not give alot of buy signals. You trade lesser, you get wrong lesser. Trading is a losing game by mathematics because every trade we make, we pay brokerage. I read through some indicators again from one of the trading books lying on my table. The magic words were printed on every indicator. "Greatest Trading Signal is when you see DIVERGENCE" It simply means that only take an indicator's buy signal when you see divergence and it is hard to come by! I have been abusing indicators as in when indicators are confirming the price trend, i took it as a buy signal. Although there are wins and losses. But the many signals caused me to trade too often. A trading system that trades often is not a good system as it subject you to more risks. Stock market is not a place where you can pick up easy money. Hence it is important that you only buy when every condition points to a buy.

So here i am, using basic tape reading and chart formations. It's back to basics for me. But I will still use technical indicators when I see divergence!

Semb Marine: A shooting star at resistance formed today. The buyers were unable to close at the high today. Not only that, the volume is heavy too. Shooting star must be respected. With a heavy volume and yet unable to close at high, trade with caution.

Keppel Land: The hanging man formed last session was confirmed with a black candle as boxed in red. Possible retracement at 3.32. The resistance at 3.62 stood. If resistance is broke with volume, it should be day light time.

Ho Bee: After the breakout at 0.55, the up move continued. It gained 0.045 cents with an increase in volume. If you had bought at breakout, you should be smiling now. Hay Bee turn Lobster liao. Congratulations to those who bought after my article on Ho Bee on 31st Aug. : )
This time is really growing money! However do watch out for reaction. This stock has move so high so fast...reaction will come.

Cosco Corp: 2.60 resistance tested and not broken with a close. Immediate support can be found at the range of 2.48 to 2.44. The volume is pretty lower than previous candle. It showed weakness in breaking the resistance.