Monday, February 25, 2008

Chart pattern coming up!


Based on the STI chart, i observed a symmetrical triangle in the making. Now we are pending the breakout either to the upside or downside. 20 MA is supporting the price currently and has just turned. This is classic T.A versus indicator. keke A favourite question asked in my T.A course. Allow me to explain how do we make use of the above information to trade.

Step 1: We form an opinion base on the Triangle first. Where is the target price. Since it's a symmetrical triangle, is there something going on that the market is waiting. Here i conclude that earning season is underway and after the reporting season, price will break the triangle

Step 2: Base on the 20 DMA, since it just turned, probably i will wait for another retest at higher level before i even wants to use it as a support to track the price.

Step 3: Decision, i will hang on to my Allgreen short position until we breakout to the upside decisively.

I apologise for the lack of sharing in recent weeks as work is really full to the brim. Over the weekend, ChartNexus made another first, our CTA course reach the shore of Jakarta! At the same time, the same CTA course was being held in Singapore. A milestone reached! Going forward, it will be fun if we can link up the Singapore, Malaysia & Indonesia one day! :D

To buy or to short? To long, i will prefer to wait for further evidence of bull. To short, i will be looking at the break of the triangle to add my short positions.

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.

Tuesday, February 19, 2008

STI update


STI: After the strong surge, market took a one day break. Last night was a holiday in US, hence today's trading will be lead by Nikkei & HSI. There will be consumer index and housing data from US this week and this can move the market. Given that we have already moved higher, we must watchout for any potential sell-off. Any pull back is best not to break the higher low order.




Tat Hong: The big sell-off after various downgrades. I could have max my profit at 3.14 high but nope! keke The stupid first day sell off meant i can only take my profit at 2.86 which i decided after it refuse to close higher at closing time. The sell off took me by surprise because i had intended to avg up Tat Hong on normal retracement. Now i can look elsewhere. haha






DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.

Wednesday, February 13, 2008

Happy Valentines Day!

First of all, Happy New Year! We tanked before and after CNY. I unfortunately cut my LianBeng to have a peaceful dinner and look at where is Lian Beng now? haha Well i'm used to it! Losses are part of the game and it is also a strategic decision. I purposely sold so that the brokerage firm owe me money over the CNY which Chinese believed once you owe somebody money over the new year, you will owe him lots for the rest of the year. keke

At this stage of the market, i am still looking around for solid buys and which sector to look at. Agriculture seems to be getting volatile and we are seeing broadbased buying. I especially like the intra-day selling that was absorbed well yesterday. Buffet and the retail sales figure was what the market needed and we are now looking at potential "W" patterns all over the place. I will be keeping a lookout for those stocks that breakout successfully from this pattern.


STI update: Currently we are trading at the resistance gap and it was closed moments ago. All the gaps in STI meant crowd behaviour and emotions at their extreme and price is not moving uniformly and this is not a good bull market looks like. The level to watch should be 22SMA, it could be a good level to short if market fails there. Even on the STI, we can see "W" pattern. I will exercise patience and not risk my money in the current overly sensitive market. Volatile market is not a characteristic of a market bottom.

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.

Monday, February 04, 2008

Chinese New Year Rally!

What timing! The rally was inline with the upcoming Chinese New Year! :D Now that we have 1.5 days before we close for CNY holidays, i am considering a hedge for my longs.

I shorted Chartered last Friday right before closing. It was a powerful rally in late afternoon and we close the week stronger. It has always been my plan to hold longs and go short one at least 1 downtrending stock. This is because I am still not sure we are out of the woods. I expect another test to the downside after the holidays hence as soon as I see weakness in my long positions, i will take my profit and add to my short positions. The rationale being, if market is to go down from here, there are 2 possibilities.

A) We achieve a higher low and selling will be well absorbed and I can square off my shorts and turn long the market.

B) We go down to at least test the low at 2745 level. If market was to head that way, i forsee it to happen in less than 5 trading sessions. Any hesistation is a sign of bulls.

2 levels we can look at from STI point of view is 3171 & 2964.

As for DJ, it is trading at the resistance level 12,800s. It is normal for a pull back as we have been going up for quite some time since the rate cut. It was a relief to see market reacts positively to the rate cut. Otherwise i would have taken a more aggressive stance in shorting.
I see DJ's support at 12,600 thereabts. But worse case scenario shouldn't take out 12340s which is a short-term fibonacci 38.2% support.

I am still not agressive in turning long on stocks. The next higher low will be excellent for me to initiate another long position. Until then, i feel it doesn't make sense to take up long positions when indexes are trading at resistance levels.

For new readers who are new to my blog and found the articles inspiring, i only have this to say, if i can do it, so can you! Trading is never a complicated affair and it is certainly not difficult unless you are trying to find a sure-win system which any experienced market participant will attest to this - it is non-existant! I too started out on the wrong foot and accumulated anything but wealth. Slowly but surely, I was able to turn profitable by managing my psychology and money management well. Of course I acquired trading methodologies known as technical analysis to aid in my comeback.

Trading should never be regarded as a form of gambling. This should be a highly regarded business where one will go through plenty of heartache, mood swing and still have the heart to continue. It is a business where failures are expected and accepted. It must be an enjoyable process otherwise those market swing days will kill the passion and joy to a certain extent, affect the personal life. One has to be emotionless in trading and this has somehow filtered into the personality. I for one has changed alot in which I would avoid senseless confrontations with fellow peers. I mean, what is there to win or lose about in an argument? Pride? Market has taught me a lesson about pride and ego long time ago. Who cares about personal opinons? In trading, we back our opinion through our positions. When we are right, we will be rewarded handsomely. If we are wrong, we accept the wrong opinion and be flexible enough to opinionate in the right direction. Pride has no place in trading. Hence, if you are new to trading, decide early if you are serious about it as a business or gambling. Otherwise don't bother, as you may end up losing in the thousands before you realise.

A simple test, from the price movement of capitaland, can you tell if it is going up or down? What are the price levels to watch out for? This is the kind of information you need to conjure opinions from.

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.