A bet on the market

Seems to me the people in the market are either staying out now or are betting on the outcome of the Fed meeting from the posts made in the channelnewsasia forum. It just occur to me that forum is a good place to gauge the general sentiment of the market beside looking at the charts.

The Straits Times Index seems to be supported on the previous downside gap now. Volume is picking up as the index moves higher and that is a healthy sign.

Straits Times Index:


In my opinion, the outcome of the Fed meeting does not matter. If the outcome turns out to be bad, the market is likely to gap down and it will be a good chance to buy counters cheaply. If the outcome turns out to be good, the market will gap up and i can ride on the momentum.

On a personal note, i sold off my indoagri today. I decide to lock my profits in instead of leaving it to the outcome of the Fed meeting. But i sold at near the low of the day and that was a lousy move. I think i need to have a exit plan cos i been thinking too much about the entry plan. Even during intra day movement, i have the tendency to sell during dips cos the fear in me sets in. When it dips lower, i am scared that it dips even lower and will have the tendency to sell. When it goes higher, i always hope that it goes higher and higher and refuse to sell. Currently, no stocks on my charts seems viable to enter. I am looking at some charts with some probable flag formations. I am beginning to think that sometimes it may be possible to ride onto a counter if there is a strong momentum in the counter on the opening without analysing the counter throughly. Biosensors would be such an example that i observed. I saw it appearing in the top volume a few days ago out of nowhere. I did took a look at the chart but it was not attractive to me. However, it has been appearing consistently at the opening in the top volume list so maybe i should have ride it's trend. I guess i need to do more paper trading on whether this is viable.

Great start of the week

Today the news reported quite a lot of stocks broke their historical high. It seems that the sentiment of the market is very bullish. I'm expecting to see a flat market soon prior to the outcome of whether the Fed will be cutting rate. Otherwise it seems that the market is confident that Fed will cut the rate so that's why it is so bullish now.

China Hong is getting less bullish since the increase in price action is not confirmed with increasing volume. But overall, the uptrend is still intact. Any drop in China Hong will see it get supported on the resistance turned support trendline.

China Hong:


Pan Hong has not been appearing in the top volume list for the past 2 closings. Today, it broke the trendline which was supporting it. There may be some chance that it is forming a bull flag but i dun have much experience with flags pattern. Need to observe more for this chart.

Pan Hong:


I got vested in IndoAgri at 1.61 this morning. It really surprise me by closing at 1.81 with extremely heavy volume. A long white candlestick is susceptible to a drop since it has increase too much in a single closing so i will be cautious to lock in profits tomolo perhaps. I would have prefer it to slowly move upwards.

IndoAgri:

Market weekend review + stock picks

For the last closing, the Dow Jones rally up quite a significant amount. This would imply that on Monday, the STI is likely to do well too. Nothing much on the DJIA chart and this is good. Fundamentally wise, there will be a outcome for the interest rate for the Fed meeting so it may affect the market slightly. I posted the DJIA chart for reference.

Dow Jones Industrial Average:


For the closing on this friday, the Straits Times Index managed to gap up and close the downside gap formed on the 22nd of this month. From technical analysis point of view, the closing of this downside gap is bullish. So we can see more signs from the chart that this correction is over.

Straits Times Index:


Last friday was a good time to pick up counters. I have been monitoring some counters which i think that they have some potential for profits and have put up their charts for reference.

China Hong broke it's historical high last friday. In my opinion, counters which have broke their historical high are likely to move upwards more simply because they have no prior resistance level. Another thing was that China Hong broke a 7th months old resistive trendline that has been tested 3 times so far. Notice everytime the counter touches this trendline in the past, it will rebound off this trendline and head downwards. This breakout was confirmed with heavy volume and another thing was that there was a bullish MACD line crossover.

China Hong:


Pan Hong broke it's historical high on thursday and it fell back on the trendline with low volume. Currently, it is supported on the trendline so this may be a good chance to enter.

Pan Hong:


On a personal note, i missed out on buying on China Hong due to fear on friday. A breakout of the historical high with heavy volume was confirmed on thursday and i should have bought it on friday. As i was going to buy the counter on friday, i saw it dipping below it's historical high value and i got fearful because of that. In the end, it rebounded and went to close way above it's historical high value. The good thing was that i told my fren to buy this counter. He managed to overcome his fear and buy on the intraday dip and is now sitting on a 7% paper profit. He was also the one whom i ask him to buy potential counters a few weeks ago which i was fearful to buy and he netted close to a 20 to 30% profit on these counters.

I think my fear is killing my ability to trade. Maybe that's why they say trading carrys a huge psychological factor too. This must be the 3rd time i failed to place a long due to fear. I must change my mindset regarding this.

Winning and losing is part and parcel of trading. I cannot expect to win all the time. If i wan to win all the time, i might as well put all my capital in the bank and be satisfied with the pathetic interest rate. Losing is alright as long as the amount of losses is strictly controlled. In any case, i am just a student. The amount of capital that i have now can be easily earned back within a few months when i start to work. I am trading now so that i can have more experience and training and not because i want to make huge profits. Furthermore, i should have more faith and confidence in my analysis and just place a long based on my analysis. Besides, my fren has been making profits based on my analysis too.

In any case, when the market opens on monday, i am just going to place longs on the potential counters and not worry too much about getting a good intra-day price. I should just buy 1st and not think so much instead of think too much and get fearful and thus missing out on a trade. All thinking should be done before the opening of the market. Once the trade is confirmed, i am just going to set a price alert and not look at it until the market closes.

Support found for STI

The Straits Times Index seems to have found support on the 50d EMA. Currently it has test the 50d EMA for the past 4 closings and it's able to close above it and that is bullish. I am very inclined to tink that this correction is over.

Straits Times Index:


I was looking at Pan Hong today. It has been a low volume counter until the last week where volume starts to pick up. I charted it since it appeared on the top volume list 2 days ago and i tot it was fishy. Pan Hong broke it's historical high with exceptionally high volume today. It is quite near the resistance turned support trendline so Pan Hong may perhaps be supported by this trendline. This may present a good opportunity to get in.

Pan Hong:

STI correction may be over perhaps

Ever since the Dow Jones fell a few closings ago, it seems to me that the STI is now following the Dow Jones closely. This will be good as there will less guessing done on how STI will open the next closing since Dow Jones is now leading it.

For the Dow Jones, i do have some reasons to believe that the correction for now is at least over. It formed a hammer candlestick on the 100d EMA. The hammer candlestick is a bullish reversal candlestick and being able to test and close above the 100d EMA is good indeed. I did a quick check on the previous corrections for the Dow Jones and came up with the level that the RSI should fall to before it resumes it's uptrend. Currently, the RSI has rebounded off this level. All these technical indicators suggest that the correction should be over at least for now in my opinion. As for the strength of this rebound, i still can't tell as there are not enough technical signs to show so gotta wait for subsequent closings.

Dow Jones Industrial Average:


For the Straits Times Index, it tested the 50d EMA today and close above it with relatively heavy volume. A/D line bullish divergence is spotted and this is a strong signal since during this period, STI trend downwards yet the A/D line trend upwards. One worrying sign though is that the RSI has not reach it's oversold level yet but in my opinion, this is a minor hiccup.

Straits Times Index:


I feel that the sentiment of the market is that the correction seems to be over. Now this is subjective since this is how i feel. Not sure how come i felt this way but it seems to me that a lot of people actually accumulate during this correction. Well, i can be wrong perhaps. Today is a good day for investors to get their shares cheaply. For traders, i am not that sure cos the market is not that bullish yet.

On a personal note, i made the same mistake once again. A few posts ago, i blogged on how i missed out on CourageMa because it gapped up way too much on opening from support and i was too fearful to buy. In the end, CourageMa just flew off the roof, leaving me behind. Gapping up on opening is a sign that the overnight sentiment of the market has changed to being bullish and i should ride on this momentum ! Today, i woke up early to check the opening and saw that all the counters in the top volume list gap up. But i din enter again due to fear. I feel like strangling myself man after seeing the closings of the counters today. I must keep reminding myself of this mistake i made and not make the same mistake again.

Straits Times Index free falling

STI really opened with a gap down today indeed. The support of around 3685 which was the prior resistance and the fibbonacci retracement of 23.6% din hold as support. Currently, it is residing on the 50d EMA. Can't really tell where it will fall to. A lot will depend on the Dow Jones later. If the 50d EMA fails to hold as well, the next support will be the level where there is a confluence of the 38.2% fibbonacci retracement and the 100d EMA.

Straits Times Index:

Huge drop in Dow Jones

As my heading says it, the Dow Jones showed a huge drop on it's chart with a long black shaven candlestick. A drop of 2%+ for the latest closing is bearish since drops of 1% is common in the volatile markets recently. The drop was accompanied by very heavy volume for the past few closings and this is very bearish too.

So what can happen on monday ? Given that the drop for the DJIA occured on friday and we had a break of 2 days over this period, we will know it 1st hand whether the market sentiment has change by seeing whether the Straits Times Index will open with a gap down. But things are complicated since in recent weeks, STI dun seem to be following the movement of the DJIA. But i do tink that STI will tank on the opening on monday. Well i can be wrong too.

On a personal note, i been looking to this correction. I have been sitting on the sidelines for quite some time already ever since the market turn volatile and bearish divergences was spotted. Only when a correction happens, den there will be room for a healthy bull run subsequently. Corrections are always a good time for investors to get their stocks at a cheap price too.

Dow Jones Industrial Average:

Calm correction of STI

Straits Times Index seems to be supported on the previous gap near the level of 3725. But the sentiment of the market seems to be calm. Or at least that's how i felt. The volume for the drop today was not that significantly heavy. Furthermore, the bullish divergence in the A/D line seems to suggest there is some buying into weakness. So overall, there seem to be no panic as of now or perhaps in other words, this seems like a healthy correction

I am now looking to see when this correction will end. So currently, i am looking at the support lines to see where the STI's fall will be cushioned. Currently, the next strong support is the prior resistance level on the 16th of july at around 3625. The fibbonacci retracement of 23.6% also occur at this level thus due to this 2 factors, i do believe this will be an area of strong support in my opinion.

Anyway, this is the 2nd time in my blog i am charting a correction. I took a look at the previous corrections and observed that having the RSI in the oversold region is a good sign that the correction may be losing steam. The other thing to look out for will be divergences in the technical indicators.

Straits Times Index chart:

Sector indices giving clues

I did a check on the sector indices on the day when the Straits Times Index drop by a huge amount which was 2 days ago. Every sector indices was down except the TSC sector which rebounded off the trendline. Now that gives us a strong clue on what counters in which sector is resillent to STI's drop in the short-term and perhaps the sector that is in play now.

TSC sector:

STI forecast

The Straits Times Index went south today and things are looking bearish. The closing today broke the support trendline which was drawn from the beginning of this rally in Aug and the resistance trendline which was drawn connecting the prior resistance levels. Volume-wise, it looks bearish since the volume is relatively heavy. All the 3 technical indicators that i used has trendlines which were broken. Furthemore, the MACD line cross over the signal line and this is bearish.

Straits Times Index :


On a personal note, i visited the channelnewsasia forum and i saw quite a lot of threads on the loss that people had due to the drop in STI today. Some even lost their life savings. And we are not even talking about a few weeks drop but just a drop in a single day so i reckon it is important to have a stop loss and protect ur capital. The more savvy traders had their profits built up from the beginning of this bull run already so when STI drops today, they liquidate their positions and still had profits overall.

Now i tink it will be good to just monitor where STI will land next in the subsequent closings and buy near the beginning of the next bull run. Not that sure if the drop will continue on tomolo. I will be observing which counters was resillent to STI's drop today.

On a side note, CourageMa really chiong up all the way up today. I missed buying it due to fear of buying high which is a wrong mentality. For breakouts, i must always buy high and sell higher but the the fear in me is that i may be buying at too high a price even though the charts are technically bullish. I guess i must change this mindset of mine if i am to trade on breakouts.

Marine counters creeping ?

I been noticing 3 counters showing a lot of symmetry in the charts. The 3 counters are CourageMa, BH global and CH offshore. ASL marine seems to be showing some symmetry too but not that similar i guess and they are from the marine sector.

First to breakout was CourageMa today. I can't really define a single resistance line but the resistance range will be from $0.445 to $0.46 so today it tested $0.465 with high volume but failed to close above and closed at $0.455. Currently it's supported by a trendline which is supported thrice and is in the middle of the channel. The charts of these 3 counters are very similar and it seems to me that BH global and CH offshore will be testing their resistance soon for this week. It may present an excellent opportunity for profits. The only thing stopping me now is the violent and volatile market now.

CourageMa :


BH global:



CH offshore:

Weekend review of market

First chart on this post goes to the Dow Jones Industrial Average. Currently it's supported on the previous resistance of around 14036. RSI is showing bearish divergence while MACD seems to be showing it too.

Dow Jones Industrial Average Chart:


Next on my list will be the Hang Seng Index. STI seems to be volatile these days and HSI seems to affect intra day movement on quite a lot of occasions. I added in the weekly chart cos i believe this will contribute to the forecast of any major movement and thus a better analysis can be performed. On the daily chart, both RSI and the MACD histogram are showing bearish divergence. For the weekly chart, we can see that HSI is supported on the trendline though the weekly RSI is showing bearish divergence too.

Hang Seng Index Weekly Chart:


Hang Seng Index Daily Chart:


On the daily chart, STI seems to be supported on the resistive trendline. But it rebounded off the resistance for the RSI technical indicator. On the weekly chart, it seems to reveal more things. STI formed a doji this week and by candlestick charting, it is suggesting that a top may have been reached. MACD and RSI are spotted having bearish divergences too.

Straits Times Index Weekly Chart:


Straits Times Index Daily Chart:


It is obvious from the charts of those indices that a lot of bearish divergences are spotted. Divergences are not signals that we must act upon immediately but they give warning signs. We shall see how true this will turn out to be. I am still waiting patiently for the bearish divergences to disappear and the increasing index to be confirmed by increasing volume. The market is volatile now with movement of 1%++ up or down in any single trading day so i am getting wary.

However, my hands are getting itchy. I feel that the marine stocks are creeping silently upwards. This can be seen in the TSC sector index and a few of the marine stocks in my list of charts. Here's one for reference.

ASL Marine formed a dark cloud cover candlestick on a previous resistance on low volume. This suggest that this stock should trend sideway or downwards. But this candlestick was formed on a low volume suggesting there may be some upside. All 3 technical indicators are showing convergence with the price action. Things will be good if it breaks it's prior resistance with high volume.

ASL Marine Chart:

Signs of impending danger perhaps

I know it does not take any technical analysis to tell us that today's drop for the Straits Times Index was really bad. I can see one huge black almost shaven candlestick staring back at me. But i may have something more to offer. By candlestick charting, a shaven candlestick and that is a candlestick where the low and the closing of the day are the same is a bearish signal. The fact that the yesterday's small white candlestick was within today's black candlestick formed a bearish engulfing pattern and this is a bearish signal too. Add to that another factor and that is the today's volume was quite heavy is also another bearish signal.

By technical analysis, today's closing seems to be a breach of the trendline that is supporting it but it might be a whipsaw. Furthermore, RSI got resisted yet again by the horizontal resistance level. So things are looking bearish. However, the level of around 3814 seems like a strong short-term support going by the candlesticks so let's just see how it goes.

Straits Times Index Chart:

Stop loss activated + lesson learnt

Today i liquidated my position in HLG after it broke the support line of $0.385 yesterday. I took a small loss though i must say it was quite painful. I can still recall the reasons that i bought this counter. Basically, it was a breakout of an ascending triangle with high volume and it pierced through the resistance of $0.385 which was a downside gap previously. Furthermore, RSI not being in the overbought region makes the deal look even sweeter. So all the technical factors were right for this counter. But alas, it did not go the way as it's supposed to be. This counter did not rally after the breakout and it fell on it's own weight.

HLG chart:


It's not the first time this has happen. A few months ago, i posted in my blog that Hi-P had a triple bottoms breakout but the same thing happened. After the breakout, Hi-P did not rally and it fell on it's own weight too. I guess technical analysis is not fool-proof and there will be times like this. I posted in my blog previously that ChinaKangda had a confirmed double bottoms and it just flew off the roof after the resistance was broken and this was when it went the way technical analysis had forecasted.

Even if HLG rallys back tomolo or in subsequent days, i will still not regret selling this counter cos i had abide by my own trading rules. The most important thing is i must preserve my capital so that i can live to fight another day. To tink of it, maybe greed had the better of me. The various bearish divergences shown in the indices and the volume not confirming index action should have serve as a warning sign that breakouts in market condition like this dun have a high probability of breaking out successfully. I will be back once the bearish divergences gets negated and volume confirms index action so gotta be patient this time round. In the next one or two weeks, i do believe that s-shares or those china stocks will be in play soon and that is if the market does not correct.

Unclear direction for STI

Can't really say with conviction where Straits Times Index will head next. It formed a bearish counterattack candlestick with high volume and got resisted at 23.6% fibbonacci retracement. Moreover, resistance for RSI still not broken. On the other hand, STI seems to be supported back on the resistive trendline. Gotta see how Dow closes later.

Straits Times Index Chart:

Roller-coaster week

It's been a roller-coaster week. From the short-lived china stocks rally to a sudden fall in the index. Den i saw the Straits Times Index affected by the Hang Seng Index and the next day, STI seems to be unaffected by HSI again.

Dow Jones has tested near the level of 14118 thrice already and a close above this level with high volume will be very significant.

Dow Jones Industrial Average Chart:


I added in the Hang Seng index cos it seems that the movement of it will affect the movement of STI too. Currently it seems to be supported on the previous upside gap.

Hang Seng Index Chart:


The Straits Times Index seems to be resisted by a resistive trendline that was drawn dating back to June this year. Currently, as what i mentioned in the previous post, the tweezer bottoms combined with the upside gap is proving to be a strong level of support. We can observed that the RSI seems to be resisted by a horizontal line that i drawn for many times already. The main things to watch out for is a close above 3858 which will indicate a new high and a break of the resistive trendline. This close should be accompanied by high volume since in technical analysis, any increasing price or index action should be accompanied by increasing volume. And the last thing to watch out for is for the RSI to break the horizontal resistance level.

One should be cautious in a market like this since we are nearing the peak of a bull market. I been seeing a lot of bearish divergences in the technical indicators for the various indices. We will never know exactly when the bear market will hit upon us. My fren told me recently that he overheard a student trading stocks while attending tutorials in school and that he overheard quite a lot of students are trading too. One of the signs of a overheated market when everyone who dun trade in stocks starts to trade stocks and that's when we see all the uncles and aunties with students speculating in the market though i'm a student too :) But speculation in the market has not reach the previous peak level as indicated by the strong interest in penny stocks previously so maybe there's still some way to go.

Straits Times Index Chart:

Brief respite

Straits Times Index has 2 upside gaps that were formed and currently one of them is being tested as support. The gaps are near the level of 3726 and 3660 and i have marked them with horizontal lines. Currently STI seem to have found support on the 2nd upside gap. By candlestick charting, STI formed a tweezer bottoms with a harami near 3754 so this level should hold as a good level of support in the short term. Today's white candlestick was formed with low volume and coupled with bearish divergence in the RSI and the A/D line, i am quite bearish about STI now. I am getting ready to exit my positions the moment they touch my stop loss point.

Straits Times Index Chart:


I will post a chart on the HSI since the Hang Seng's movement has been affecting the STI's movement recently.

Hang Seng Chart:


There was movement in yongnam as it formed a white candlestick with relatively heavy volume today. Moreover, CSC and Koh Bros found support on the charts that i charted in my previous post despite STI's drop 2 closings ago. This augurs well for the counters in the construction sector and these counters could be worthwhile holding on to.

Comrades not moving

Today, all the china stocks did not continue yesterday's rally. I saw a lot of dark cloud covers for the china stocks so they should be trending sideways or downwards in the short term. Dow Jones broke the prior resistance of 14026 with quite heavy volume. The movement of Dow Jones has been diverging from that of the Straits Times Index so but i will just post the chart up for reference.

Dow Jones Industrial Average Chart:


Below are some charts which i tink are ripe for a trade entry based on technical analysis only.

HLG broke out of it's ascending triangle with high volume. With RSI still not in the overbought region, this seems like a great point for a trade entry.

HLG Chart:


The construction sector seems to be rallying. Below are some of the charts that are related.

Koh Bros is having a breakout of the ascending triangle. But the price seems to go too far for a trade entry perhaps.

Koh Bros Chart:


CSC is showing an healthy uptrend with an increasing price action and expanding volume.

CSC Chart:

China stocks in play

I wanted to place a long on sino-env and delong today so i woke up at 10am. By then, sino-env and delong has risen too far for me to place a long without taking too much risk. For the record, when i log in at 1030am, sino-env has already rise by close to 20% if my eyes were not playing tricks on me. So i miss out of the china play altogether for this week but at least my fren din since i told him to place a long quite some time ago so now he owes me a meal :)

Right now, i do tink there is a lot of speculation on china stocks. Basically every stock that had the word China in it went straight north through the roof. Such a sudden upwards movement is prone to retracement. I am looking for a retracement with flags formation on low volume this time round perhaps.

Quite a lot of indices are showing bearish divergence and that includes the Shanghai Stock Exchange with both MACD and RSI showing bearish divergence. I am not doubting the charts or the technical indicators but i do think my trading rules regarding indices is too strict. Due to my conviction that the indices are not showing the go ahead signal in my opinion, i miss out on quite a lot of profitable trades for the past few weeks. Maybe it's time to modify my trading rules slightly.

Straits Times Index Chart:


The sesdaq chart has close the gap and broke out of the ascending triangle formation. But bearish divergence on the RSI is spotted. This move should be short-lived.

UOB Sesdaq Chart: