Sunday, October 30, 2005

Short Trading Week

It's going to be a very challenging week to trade this coming week. Trading days will be Monday, Wednesday and Friday. Who will dare to hold on to shares with Tuesday and Thursday being holidays. That aside, there will also be holiday makers who will seize this chance to take a break away from market and Singapore. With all this factors in, volume will be thin and market, quiet.

US market Rallies on Friday and bring about much joy and bullish faith as the market rebounded strongly. This time the reason was given as the better than expected GDP growth despite the hellish torment from Hurricanes. Also, I think most traders are betting that the new Fed chief will not be as enthusiastics in hiking interest rate that often.

I anticipate market to recover some if not all the loss last week and the return of the bull rally. Results so far has been decent and i don't see why are we selling down. With so much fats shaved off, prices look cheap again. Bargain hunters should return.

No charts tonight as I prefer to watch tomorrow's closing to confirm the tone of trading for this week.

Thursday, October 27, 2005

Selling Ensued

Banks, Off-shore & Marine & Property plays continued their weakness today. After a lacklustre morning, selling came after lunch with strength. Amid the reasons i heard in forums includes bird flu and GM's supposingly filed a chapter 11 (Bankruptcy protection). The index has now closed at a new low not seen since 30th June 2005. We need bargain hunters to return to push up index. Otherwise, more sellers are expected as they will lose confidence in holding on to their shares. It must be noted however, a rebound from here will be a good sign as it will create a new support level as this was the previous low set last Thursday. The ironic thing is, we have pretty decent earnings report other than creative's results. Tomorrow DBS & UOB will be showing their results which according to analysts are expected to be good. Poor consumer index reading could hurt stocks a bit. I suspect the poor CPI is due to the immediate after effect of the 2 hurricanes. Once lives are back to normal, people will start to have jobs and will spend money again. Currently we still have not seen earnings being affected by the high oil price. Hence I am still bullish about equities. It must however be noted that opinions are often wrong, market is never wrong. : ) I will just observe and take the neccessary actions.

My breakout counters have retraced. However, if you notice, the volume of the retracement is less than 50% of the breakout volume. I would attribute it to weak holders who decided to cash out their profits in a stormy market. I would worry more if the retracement is of a heavy volume or the retracement continues with constant or increasing volume.

Have you notice I had been talking about volume alot? Volume and price actions are the most neglected essentials in most analysis. This is the true parameters that the market technician should be most concerned about as they show the sentiment of a stock.

Wednesday, October 26, 2005

Mixed session, Direction unclear

Market is still heading to nowhere and trendless. I am staying away from index stock for the moment as it can swing either way. We saw how nasty it can get with a 66 points drop last week. However, i do note that the selling in some of the bluechips is weakening and that bargain hunters are buying hence supporting the bluechips. I shall continue to watch where index is heading. Trading requires lots of patience. Impatience kills in Stock Market.

I spotted another 2 breakout buys. The 3 breakout buys yesterday continued it's up climb much to my satisfaction. For those invested, let's hope we never had to consider selling. Cheers!

One thought I had about Technical Analysis. It is by no means a magical crystal ball into the future. The indicators provide us with the current trend and the buying/selling strength of the stock. A very complex chart with 5 technical indicators doesn't mean it will be of a more accurate reading. I do use RSI, MacD, Stochastics, Bollinger, Candlesticks formation and chart formations in all my analysis. However not every indicator will have something to tell about the stock. Hence I will only include indicators that will tell us what is probably going on.

Last but not least. I will be shouting breakouts at around 4:30pm if I spot anything. This is done so that we can get before market close. I had seen how we have to get at a more expensive price the next day. : )


Hyflux - great chance on weak pull back


Sembawang Kimtrans - Resume of uptrend?


Fung Choi - Something is brewing in this stock.

Tuesday, October 25, 2005

Fishing amidst Chaotic Market

Enough of the trade with care, now is not the time to trade articles. When the market crashes last week, there were many bearish remarks. Then we saw how market became extremely volatile with up and down swings. Today was a perfect example of how our market gap up on US overnight rally and only to see it falters back to previous close there abouts. Very weak indeed. I am still waiting to see market test the fibbo retracement of 23.8% at 2138 thereabouts. Amidst the chaos, there are bound to be opportunities. With market sentiment on cautious mood, i sensed selling pressure has eased. So here I am, venturing out to fish!

Tonight I spotted 3 breakouts which I think could have potential in this volatile market conditions. Charts finally..... : )


Media Ring - Short term trade


Hyflux - Mid to Long term trade


Global Voice - short term trade

Monday, October 24, 2005

Case study: how do analysts give recommendations based on FA and TA?


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For more details, please visit: http://www.terraseeds.com/course001_tw_kt.htm

Sunday, October 23, 2005

A dirty Stock Market

Trading is indeed a tough game. After the bloodshed on Wednesday, we saw some minor rebound on Thursday and Friday. It began very threatening on the downside on Friday Morning. However, bargain hunters returned to the market and bought as though it's the Great Singapore Sales. Thus making my disciplined cut loss on Thursday look stupid. I honestly did not expect the recovery to be so quick so strong. What is going on? Why the sell off on Wednesday which look very much like a bear strike and then a Friday where the risk of holding over the weekend was overlooked by bargain hunters. I do not believe those silly reasons offered, interest rates, bird flu, end of bull run...etc... The selling on Wednesday is a very well coordinated affair accross all regions. I felt terrorised. In the last 2 chapters of his book, Livermore explained in details how dirty the stock market was, well he did not explicitly said that, but i drew my own opinions. He was paid to manipulate stock prices of a dormant stock. He also described how he knew who are the stock operators in some stocks. If it can happen during his time, I do not doubt it can happen in our time. Think! Have you ever seen a stock price rise well ahead of their results? Surely it's a no brainer that "people" knew that positive news is coming and bet it. How did they know? I leave it to your imagination. Another example is how SGX steps in and request information if a stock price rockets with unusually high volume. The company will reply ignorantly instantly. However, 2 weeks later it announces a very positive news.

Conclusions, I will remain cautious over the market and prefer to see a defined trend before attempting another trade. The market look to have recovered with that buying on Friday. US stocks look set to reverse fortunes with good earnings reports expected. But I will always remind myself to expect the unexpected. I will stick to my system. It's either when I see strength in resuming the major uptrend, or I see lower highs.

Let's see if I can draw some nice charts after tomorrow's session.

Wednesday, October 19, 2005

Singapore Traders Unite In Mourning

A very fierce wave of selling came into market today. Everyone was caught off guarded by the veriocity and power of the selling. By noon, a good 40 points decline left everyone stunned. If 40 points wasn't scary enough, we close the day -66 points and broke through support levels cleanly. Stunning! Many were moaning and groaning about the pain of losses and even more are bewildered by the selling. No one had answer to why did the market end like this. Bird flu, Hurricane Wilmar, Intel's Q4 warning & interest rate hike were quickly made the scapegoats. Don't ask why, just ask what you will do if market gets there. Regional bourses were not spared too.

Looking into the history, it looks like there will almost certainly be a technical rebound next day. But I am still going to be cautious. The charts looked very sick to me at this moment. Technical wise, we could see STI head to 2138, the 23.8% Fibbo retracement since the rally started in 2003. With the earnings season coming up, i am really curious about whether there will be a rally next 2 weeks.

Fear got to me today. I had the brains to apply the downside breakout trading system and shorted simsci at 267.5 when I see weakness. However, I covered my short at 268.4 due to a rebound. Nothing wrong as I applied my cut loss. However Simsci then break 267.5 once again but this time round, I didn't have the guts to short...fear got to me. In the end, I missed a glorious chance to short at 267.5 to 262.0 at least! The feeling is awful.

Stocks wise, I had cut DBS, a 50% ROI turn to brokerage loss, Media Ring, a long term investment pick turned sour as stop loss was triggered.

In this bad time, the weak will be holding and hoping while the smart ones will cut positions if stop loss was triggered. Legendary traders never sit on paper loss and hope, they cut when they are wrong.

Tuesday, October 18, 2005

Dead Cat Bounce?

After continued selling throughout the day, at 3pm, market rebounded and closed above their lows. UBS had downgraded Capital Land, Keppel Land and City Dev from Buy to Hold...triggering selling in these counters and resulted in our STI testing support and broke it during intra day. Although there was a rebound, i am still not comfortable with the lack of buying interest in the market. With global indexes weakening, STI won't lead, this i'm pretty sure. Currently STI still staying afloat on major 2280 support. Break that, we might see an unfamiliar 2250 levels.

I'm standing aside and guarding my 2 counters closely. No buying for me. The inability to break STI high is a warning sign to me.

As for Simsci, I had adopted the fish at bottom or buy at breakout strategy.
Here are the highs and lows of 20 and 50 days period.

20 days
High: 279.9
Low: 269.0

50 days
High: 282.4
Low: 267.5

Monday, October 17, 2005

Did smart money known it earlier than us?

After posing a poorer than expected non oil exports in Sept, our market gave way...simply gave way. I'm sure lots of people are moaning and groaning in pain. I am one of them, having caught cosco babies at 0.380 and had to cut at 0.335. However I only buy small lots. I realised catching a bottome is very risky as the low can go lower, hence i attempted small. We are now very near the uptrend major support for STI at 2280. Break that, and we risk a bearish reversal. Our index refuse to break the 2325 resistance convincingly despite a better 3Q. So now we knew why last week we ended so badly. The smart money had already left out market last week and watch us, the naive retailers sell on news (poor non oil exports). Trying to recall I think last week's selling should have served warning. While the mini rally in US market on Friday could have caused many to believe that we will have a good week, how wrong we were. Market is never that easy! With the econ data coming through at noon. The way the stocks refuse to rally, the signs were there. Remember, smart money are always first to the information.

The current STI is trading near the support line, this is a very good risk/reward spot to fish. Upside will be a rally to 2325 or cut once 2280 is broken.

Crude oil price went up a dollar at the time of my blogging. It was reported that a third hurricance could be coming towards Gulf coast again! Amazing! How unlucky can US get???

And for those who believed in Astrology, a fellow astrology analyst shared in ShareInvestor forum that 17th Oct was an eclipse and we truly saw market tanked. But funny, why only Sinapore market got hit. Anyway, there will be a bradley turn date on the 21st Oct. This turn is a major turn for stock market.

As for Simsci, I had adopted the fish at bottom or buy at breakout strategy. Here are the highs and lows of 20 and 50 days period.
20 days
High: 279.9
Low: 269.0

50 days
High: 282.4
Low: 267.5

Sunday, October 16, 2005

Mini Revival

After a blistering start last week, we ended the week just as we had begun at 2300 levels. Pressure of inflation on US economy weigh down the market even though we have a solid Q3 GDP. There could be another test on the 2280 there abouts support of the STI. It could be a good time to do some fishing of stocks. But if it cuts through that support, I will cut positions.
However, US economic data showed that inflation fears were overdone and we saw how Dow and Nasdaq reacts. With seasonal earnings coming up. The earlier sell down could have offered excellent risk/reward chance.

As for Simsci, I had adopted the fish at bottom or buy at breakout strategy. Here are the highs and lows of 20 and 50 days period.
20 days
High: 279.9
Low: 269.0

50 days
High: 282.4
Low: 267.5

Wednesday, October 12, 2005

STI infected with Dengue Fever

I suspect STI is infected with Dengue Fever. Blowing hot and cold in recent weeks. Today, market didn't like what the Hong Kong leader's speech and cause a tremor with the epicenter where else but Hang Seng. Tokyo escaped because it closed early. Again there was broad base selling with VOLUME! It reminded me of last Thursday where index dropped nearly 40 points. The next day however it rebounded. Can we expect to see history repeat itself? Watch on man...it's as good as anybody's guess. But a decent rally from Dow Jones & Nasdaq can help the cause.

Survive, Profits, Massive Profits

Have you heard of the above phrase? It means you must first learn to survive in trading. After that, you will have profits followed by massive profits. I think I am still at the first stage. I watched my profit evaporates first from SPH babies then from Simsci today. Both average about 50% ROI. Trading is indeed tough. When I sold Keppel Land too early last week, i missed 100% ROI . This week, I stick to my discipline and saw my profits evaporates. While I have the brains to take a quick profit off SPH babies, I stupidly let my position in simsci turn to a small loss. What to do? Just have to stick hands inside pocket and move on. I shall continue to stick to my system and rules. One day I will be rewarded. I still have 2 positions in market. Let's see how I will end up.


Cosco


SPH - I expected the market to dislike the normal dividend but I never expect the selling to be of this magnitude. My 70% ROI slashed to 10% as I cashed out today.

Simsci Update: There is a gap from 272.4 to 273.3 . With today's closing, it won't be a surprise to see it test this support area.

Tuesday, October 11, 2005

Profit Taking Day

After a spectacular Monday, we sucuumb to profit taking. It was a broad based accross the board selling after the morning gains fizzles away. I think this is reasonable and healthy as long as support are not breached. Market seldom travel 1 striaght line up. Selling has not been very heavy. Property counters selling pressure was very well absorbed. Look out for late buying. This is the sign of a bullish market.

The limelight was casted on SPH who had released it's FY05 results. While the result was better than what analysts estimated. There was no bigger dividend as the full year dividend stood at 0.22 per share for FY05. The recent run up was based on better than expected dividend giveaway. I advise caution for tomorrow's opening bell. Market's reaction to this news is important. It formed a small body with upper shadows and lower shadows. Nothing bearish. It is just an expression of indecision.

I am still holding on to my simsci long contract from Monday. It tested 279.9 today and I thought 2800 was imminent. Alas, it only manages to close at 278.9. If global indices show strength tomorrow, i'm sure 2800 will be breached! Best is a gap up!

DBS was simply breathtaking. On the way to test it's $17.00 high. The chart was posted yesterday. I hope it benefited some of the readers. : )

No charts tonight as I didn't see any equity worth the risk/reward.

Monday, October 10, 2005

Grow Money Time!

Nothing short of spectacular! If you have seen our market today, red hot! Last Thursday's massacre looks like the final spike down now that the stubborn 2325 has been convincingly broken. Towards 2400 we go! Today the market was upbeat because we have good 3Q numbers. With good 3Q numbers, the corporate earnings season starting next week looks set to be filled with good news. The market like the idea.

2 stocks highlighted last week made their move. Especially SPH...simply awesome. Jaw dropping performance. DBS also broken it's resistance. With Keppel Land and the other property counters pushing new highs, the whole market seems to head higher. Surely this time round with STI and most of the component stocks breaking resistance, this move should test 2400?

Today I finally benefitted from my own posting. : ) After missing the big move by Keppel Land, I am very much into profits....a quick count shows at least 50% ROI. This having vested since September. Not bad...alas i'm rewarded for my hard work. The laymen believed trading cannot make money, but we traders had seen the money and knew how it can be done. Market only reward those who are hardworking in learning.

Finally, let's cross our fingers and hope Ah Gu (*Hokkien for bull) will be here to stay. No more false alarm please!


SPH


DBS

Sunday, October 09, 2005

The True Decipher Story...greed, fear, hope...

It was a week of mixed emotions for myself. I took time off and began reflecting on my short 19 months trading journey so far. There are more wrongs than right things I had done. That explains my negative profit and loss. I had read more books passionately than during my school days. I had stayed up late into the night studying charts and reading trading books which I'd never see myself doing when I was still a student. Yes, I learnt alot and experienced alot. But alas, I still made the worst and most reminded mistakes during the last 2 weeks. Since I cut away my HG-Metal loss, Everything was going smoothly and I had been faithfully and consistently sticking to my trading system. Emotions were kept in check as I blogged down my thoughts and near miss. Then I began to see many of my picks became top movers. Confidence grew and I got invested in some counters and sat of paper profits. Then recently...

30th September: Alerted to take a look at Bio Treat. I saw the chart and thought yes, it stood a chance for a breakout. Hence I contra at 1.04 out of greed for a fast gain. During intra-day, it dropped to 1.01, fearing a reversal and breakout downwards, I cut at 1.01. Resulting in my first loss in 3 months. Mistake here was, I shouldn't have contra. Trading is not an easy game. Most people got it wrong than right. I admit. I was greedy for quick profits and hence contra'ed. Another mistake i commited was to make decision during intra-day. Fear got to me when I saw 1.01, and I immediately cut the position. By the closing bell, it closed at 1.03, I could have loss by a smaller margin had I kept my cool.

The worst mistake was to let fear interupt my trading system. Moments after I swallowed my contra loss at Bio-Treat. I immediately took profit at Keppel Land babies. I bought at 0.460 few weeks ago and then when I saw a high of 0.490, I just couldn't resist in taking that profit to offset my contra loss. How wrong I was. Trading Legends has always said, "Let your profit run, and cut your losses fast" I did the latter right but failed at letting my profit run. I'm sure all of us now know that the Keppel Land babies are now trading at 0.810. A massive 75% profits. This was indeed a very bad Friday for me.

6th Oct: The STI's heavist decline day in six month saw my position in SIMSCI badly hit. I had taken a long at 273.1 and had to cut loss at 270.7. I checked the history and thought the index would make a technical rebound. It did, but the rebound was never close to my long contract. Hence by 5pm, I did not want to subject myself to more risk by holding overnight and decided to cut it. No Technical Analysis nor Fundamental Analysis can prepare you for a bad day like this. Shit happens once in a while. Mistake I made here was holding on to hope that the index will rebound and I am able to get out on the cheap. What I could have done is to take the loss as soon as it hit my stop loss. I had no stop loss and allowed the index to sink southwards. Anyway, I shouldn't have traded on that day because all the indications of a bad day was there. Nikkei & Hang Seng tanked 300 points each and Dow Jones downed 120 odd points over night. Why am I betting on hope? Greed. The thought of doing a quickie got to me.

Such is the power of psychology in trading. In the above true cases, I had been beaten by hope, greed and fear. If I want to suceed in the business of trading, I must master that 3 emotions.
I truly believe that psychology in trading is as important as the trading system and money management. It will be the next book I'm going to lay my hands on.

Wednesday, October 05, 2005

Stupidity or Greedy? I am both

I am stupid to have not followed my trading system and greedy to have taken profit too early! 5 hours ago, I was trying very hard to contain my disappointment. I felt like a fool and really didn't have the heart to think about trading, i just missed out on a big mover. Infact I shut down my live prices even before the market ends. Today Kep Land has rocketed $0.20. I had the vision of this happening and hence I had vested in it since September. I sold last Friday when I thought $4.70 was all it can go. How wrong I was. I bought when my system said buy but I sold when my system said hold. After reading so much and knowing so much, I still make the same amateurish mistake of deviating from a trading plan. After a walk down Orchard Rd alone deep in thoughts, I am back! I think from this misfortune, although I did not make as much as I could from Keppel Land, at least I was right in picking it as one of the market leaders and that property counters are the one to watch. Mistake I learnt today is never to deviate from your system. If you use T.A to buy, use T.A to get out.

STI closed at 2325! It's a very teasing finish. Volume is good and there is follow through buying. Signs of bull are there. I am seeing better volume and setups of breakouts in some counters. Watch out for them. Selling pressure during the intra day has been very well absorbed and late buying was seen.


UTAC


SPH


Keppel Land - post mortem


Cosco - Bottom Fishing

Tuesday, October 04, 2005

Expect the unexpected

Today's actions reminded me that trading the market is never easy. A bullish rally today came unexpectedly although i'm bullish about the market. Infact I thought it should come within these 2 weeks. Histogram on the weekly chart is in a great position to form a bottom. Next week is 3Q GDP and the beginning of corporate earnings. However, I am reminded how the last 3 weeks, we had bullish rally fizzles out when STI hit 2325. Today it closed at 2323....very close. If it can close above 2325 convincingly, 2400, here we come! Most would have expect the rally to continue tomorrow. But I had seen how next day can close back down by more than 10 points. Today's rally was lead by property sector again. Notice how this sector keep popping up? If you have not put your money on one of the property counters, do so before you find yourself missing out on a major move. So far I have a very wonderful position and am looking forward to the next pull back to add more. I'd look silly to have taken profit at Keppel Land too soon. Indeed, trading is never easy. What I can console myself is at least I have started to turn in profits instead of losses.

Simsci wise, it close on it's resistance 2748 today. I will be keeping a close watch on the volume and price actions of bluechips to determine if I would short simsci contract. Otherwise if all is bullish, we could see simsci trying a 2772 soon.

Reading past posts, I can see myself getting less aggressive and greedy. I always remember psychology, system & money management is the 3 great pillars of trading. Now I have the 3 working very well for me, no wonder I am no longer losing money. Everyone paid tuition fees when they begin trading through to the time they can trade good. I'm glad mine came earlier at a cheaper costs. Stock market is never easy, be less aggressive and patience had worked for me. If price is too high, no matter how attractive it looks, there are 699 other equities waiting for you to pick. Or I will wait for pull backs.

Most charts look like at a point of no return. Too high in my opinion. I rather wait. Did you notice the charts i post so far has a great degree of accuracy? and that most are big movers? It is not luck nor coincidence. Rather, it is because I post charts of high odds of a breakout after following them closely for the past months. So you can be assured, chances of 1 day wonder stock is rare here. : )

By the way, those who do not believe in T.A, can I just add, T.A is not a crystal ball. Yes it judges base on what already happened and the past does not equals the future. T.A for me is the story of human emotions on the charts....fear, greed & hope. If you can analyse the sentiment correctly, you will be able to capitalise.

Monday, October 03, 2005

Calm before the storm

Another mixed day of trading today. The Bali bomb did not impact us too much. Sorry folks, there are no charts to post today. I wouldn't want to chart anything on a biase sentiment. Indecision is all I see. It's easier to pick a winner in a bull rally than on quiet days. For me, the risk just ain't worth it.

My decision to take profit on Keppel Land babies looks good. The closing of 0.490 was shaved to 0.455 today. My buy price was 0.470 then. So now i await another opportunity to buy back this IR babe.

SPH continues to be a mystery to me. If the selling is fierce, so is the buying. Good buying support has been seen keeping the price above 4.60 in the last 2 sessions. The recent push up to 4.70 could be the chance for those big players to sell and get profit! Damn, i was too slow to realise that.

A pilot test for those who loves breakouts. My second system picks up:
Broadway
Guthrie

Let's see how this two perfom this week.

Sunday, October 02, 2005

Tricky market

Just when I thought our market will be making a move towards 2400, we got a knock on the head at 2325 once again. However, this is by no means the great reversal back to the 2200s level as we saw how market close at 2305. This is sideway trading. Consolidation continues. The delay in IR RFP did not help as well. The longer our market consolidates...the more powerful will be the incline! 2325 is key here, once it's broken, we may see a test to 2400. I will be loading up bluechips to get ready for the typical earnings season.

Simsci wise, it's really a very interesting derivative to trade in. So far i'm enjoying myself. Currently i'm doing an analysis of it's past data to catch any pattern or trend. I will share when I have the analysis ready.


Cosco Corp, bottom fishing chance.


Ho Bee, top pick of last week