Saturday, January 26, 2008

I have sinned; I had LianBeng for lunch

After seeing a strong and firm morning session, i skipped lunch and began to screen for stocks to analyse, formulating scenarios in my mind and came out with a few conditions. If those conditions are met, I shall try long. Firstly, Nikkei closed the week with a hammer on the weekly chart. HSI after the massive sell down on Thursday did not have follow through. If it was really that bad, HSI would not have rallied on a Friday where traditionally no traders will carry overnight positions. Nikkei, HSI & STI all three indices has something in common. Hammer candlestick on the weekly chart. This is one component of a reversal pattern and there is a chance next week, we will close higher. Hence for next week, any weakness could be a good chance to long. Especially those agri & commodities stocks.

When the market opened after lunch, I saw LianBeng's chart and salivates. One of the rare stock still trading above the 200MA. Price actions wise suggest there is a hungry Pacman at work. 585, 600 were the levels i was watching... I established my line at 585 to 595. Once 600 clears, it is expected it should fly. However, it is a risk i am taking. I anticipated a pull back and i could have waited for the pullback to strike. Alas, i'm human afterall.

With DJ selling off, Monday could start weak. Eyeballs should be transfixed at Nikkei, how it handles the selling. It is afterall normal to have a small reaction after the big rally. Let us look towards for a higher low. Huat ah!

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