Sunday, April 26, 2009

The week ahead

It would have been easier if the week close lower as i anticipated, but it did not. Most indices close slightly lower leaving a lower shadow. Thus i have to re-examine my trading plans...

STI: STI seems to be holding well near the 1840s to 1850s level. The bearish divergence may have been neutralised. Time to go long? I checked across the sectors, majam mostly are trading at base forming a support. I have seen many times how a base is formed and then we see the subsequent market rally fizzles out and caught many at the high. The only safe way is when i see sectors rotating again. What I am seeing now is stocks forming base.... the key word is forming, thus, until it is completed, then i feel safe to long. In a base, we have to watch volume too... it must be those of good base.. otherwise, may not be strong. Once i see good base, i shall kai seow here.

HSI: Is this a double bottom? 15.8k is where the axel stands... If HSI breaks this level, it may trigger a double bottom breakout. Otherwise, we can always wait for a pull back to re-test as support. Here i would like to share a story.... there was once when HSI broke 21k back in 2007, each day, i tell myself not to risk it and wait for pull back... guess what, the significant pull back never happened, it went all the way to 34k! :D hahaha You can imagine how green my face was.... it was once in a blue moon that markets move like this... alas on the hindsight, we now know, it was the last burst before the bear market descend upon us. Thus, once 15.8k broke, to wait or not to wait for the retest?

DJI: I saw the 3 hanging men.. bearish candlesticks on the weekly chart serves as a warning to me if i ever consider to go long at this stage. I have to be selective and cautious. I certainly do not want to be caught long when the market turn suddenly. Especially since the treacherous May is coming up. Currently most of the earnings beat estimates.... market ignored the fact that outlook is still dull... perhaps this is why many reports said the worst may be over. No short for me yet until the market starts to turn down. Because i see Dow may still have limited upside... but is it worth the risk for limited upside? Perhaps it's wiser to wait for the limited upside to complete and join in the selling?

DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.