Paper Trade of SuntecReit

Simple breaking of support with heavy volume.

Shorting SuntecReit on market opening of Monday, 15th September 2008.
Filled at $1.31

Covering SuntecReit on market opening of Tuesday, 16th September 2008.
Filled at $1.24

Percentage profit with commission at 5%.

SuntecReit on 12th September 2008

Paper Trade of SembMar

First profit target at around $3.3 has been achieved to my surprise within such a short period of time due to the sudden plunge of the Dow Jones Industrial Average along with the Straits Times Index. Inverted hammer with a extremely unusual long wick formed that tested $3.3 as a resistance level. I will be covering the short if it breaches $3.3 again.
Saw 10% profit went up in smoke. Should have took profit knowing that the steep plunge was unsustainable.

Shorting SembMar on market opening of Thursday, 4th September 2008.
Filled at $3.51

Covering SembMar on market opening of Thursday, 8th September 2008
Filled at $3.49

Percentage profit with commission at 0.2%.


SembMar on 8th September 2008



SembMar on 5th September 2008


SembMar on 3rd September 2008

Paper Trade of City Developments

Bear Flag spotted for Capitaland but it broke out too far from the resistance cum support line. Shorting City Developments instead due to breakout of the right-angled ascending broadening formation.

Shorting City Dev on market opening of Tuesday, 19th August 2008.
Filled at $9.97
Covering City Dev on market opening of Wednesday, 27th August 2008.
Filled at $10.04
Percentage loss with commission at 1%.

Got whipsawed for the 3rd consecutive time. I was not at home yesterday so I din manage to update my covering back of the short this morning. It is getting harder and harder to trade. It is to my surprise that I got whipsawed on City Dev when the other property counters such as Kepland and Capitaland continues to head south.

City Dev on 26th August 2008


City Dev on 18th August 2008

Paper Trade of Noble

Taking a another go again due to Noble forming a head and shoulders formation.
Got whipsaw again. This time, it is a huge whipsaw and unexpected things do happen. Should be looking at a loss of at least 5%. The main reason for this huge loss is because of the release of results for this quarter by Noble. Perhaps one should not take position before important dates such as this.

Shorting Noble on market opening of Friday, 8th August 2008.
Filled at $1.88
Covering Noble back on market opening of Friday, 15th August 2008
Filled at $2.10
Percentage Loss with Commission at -12.0%


Noble on 15th August 2008


Noble on 8th August 2008

Paper trade of NOL

Shorting NOL on the market opening of Tuesday, 5th August 2008
Filled at $2.63.
Covering back on market opening of Thursday, 7th August 2008
Filled at $2.64.
Percentage Loss with commission at -0.68%

Got whipsawed. The feeling of being whipsawed is horrendous. Especially, when NOL tanks immediately after opening.

NOL on 7th August 2008



NOL on 5th August 2008

Back from 3 months hiatus

I am finally back from a 3 months hiatus. The last post I made was on 7th of May which was like 3 months ago and that is such a long period of time. During this period of time, I was attached to the main shipyard under Sembcorp Marine. I guess I was also pretty drained from blogging on a regular basis so I will be blogging when there are important stuff for me to post or just to share some of my observations.

During this hiatus, I actually completed the 'The Intelligent Investor' by Benjamin Graham which I bought it 4 years ago but I always cannot find the determination to finish it. It is ironic that I only finished reading it in a month's time during my internship. I must say that it has been an eye-opener as I learned the concept of buying undervalued companies and the all-important concept of margin of safety. Suddenly, terms like NAV, NTA, P/E, ROE and all the weird-sounding acronyms made sense to me now and I will definitely be doing additional readings on this subject. I have also completed half of the 'Encyclopedia of Chart Patterns' by Thomas Bulkowski and it was a rather refreshing read for me. This is definitely a good book to have since the author has done extensive research on the different types of chart patterns and I must say that after finish reading this book, a lot of technical analysis books in the market pales in comparison to this book.

Technical Analysis is now just a tool to me. Just like an painter has various colours on his palette, it is good to acquire more tools. A painting will not look that great with only just a single colour unless the painter is exceptionally skillful.

For the past 3 months, I have been watching by the sidelines and waiting to collect some counters cheaply. The blue chips seems to be at fair valuation now since they are only trading slightly lower than than the historical average of a P/E of 14 to 15. I have been observing some of the movements for the Dow Jones Industrial Average and the Straits Times Index and I do notice something interesting.

If you look at the weekly chart of the Dow Jones Industrial Average, you will notice that the volume of the market has been increasing ever since the bear market started close to a year ago.

Dow Jones Industrial Average:


Now if we take a closer look at the Straits Times Index, you will notice that the volume has been receding ever since the bear market started. Another important fact is that the Straits Times Index has not broke it's lowest level yet.

Straits Times Index:


Now the conclusion seems to be more tricky to me and I do have problems interpreting it. For the Dow Jones Industrial Average, I can conclude that the heavy increasing volume is due to real panic and bearishness in the market. I doubt the end is even near since the volume do not seems like it is going to recede anytime soon. As the saying goes, the bottom for a bear market is found when no one wans to buy any equities and this can be seen technically by the low volume. Now for the Straits Times Index, the volume is already receding. In my opinion, this does not mean that the bottom is near since this depends on the Dow Jones Industrial Average. So the question I posed to myself is that will the Straits Times Index continue to head south slowly by it's own weight or it will recover sooner than the Dow Jones Industrial Average since it has not breached it's lowest level yet ?

STI breaking out of head and shoulders

STI seems to have broke out of the reverse head and shoulders formation but it din really broke out nicely. The breaking of the trendline was not coupled with heavy volume and on the last closing, STI seems to have fall back on the resistive turn supportive trendline with heavy volume. The bearish divergences on the indicators are still intact.

Straits Times Index:

The worst seems over

I know my title sounds quite obvious cos it seems to everyone that the worse is over. I can feel that the retailers are trading albeit with more caution this time. On the Dow Jones, it tested the 200DMA as resistance with an inverted hammer and the chart is showing some divergences on the indicator. Personally, I feel that it is not a big issue cos I dun see what else can hit the market. We should be looking at a breakout above the 200DMA soon. The last time DJIA ever kiss the 200DMA was a good 5 months ago. But chart-wise, let me just take it objectively that DJIA has failed to break above the 200DMA and the 200DMA is a resistance level currently.

Dow Jones Industrial Average:


The Straits Times Index seems poised for a breakout for the reverse head and shoulders formation. It seems to be a breakout but it is good to wait for one or two more closings to decide. Chart-wise, all indicators are still showing bearish divergences.

Straits Times Index:


These days, I feel pessimistic when the indices are moving north instead of being optimistic. The more the indices plunge, the happier I am and I think I am sadistic. For me, I feel that I will have to wait quite long to pick up counters at a discounted price. I guess it is exactly the feeling of how an auntie goes for bargain shopping :D. Besides, the last few months are a bad time to go long.

Missed out on formation on the STI

Yup, I realized there is a reverse head and shoulders formation forming for the Straits Times Index while browsing at other blogs. I have marked out the shoulders and heads with the arrows. However, do bear in mind that it still have not break out from the trendline yet.

Straits Times Index:

Back from a long respite

I took a break from blogging due to some personal reasons and besides I'm in midst of my examinations with another week to go. It's been a really long time since I posted anything. Guess I needed a break to consolidate my thoughts and to plan for the future with a longer time frame.

There has been a lot of interesting movements in the charts. I must admit that this period is a very hard time to do any trading as one is prone to whipsaws. 12800 was the crucial level for the Dow Jones. After it broke the 12800 resistance with a shaven white candlestick and coupled with heavy volume, it seem poised for a strong run upwards. Alas, it fell back below the 12800 and a whipsaw happened. And the strange thing that happened after this was that it tested the 12800 successfully with a hammer. Thus it is not an easy time now.

So what do I see now for the Dow Jones ? My opinion is that the trend up is weak given the declining volume. Besides that, there is a bearish divergence on the MACD histogram and there seems to be some divergence too on the RSI though I did not label it. The nearest resistance would be the 200 DMA.

On a side note, the chart seems to display a valid confirmed double bottoms formation that has breakout successfully. I do notice this formation is rather prone to failure and whipsaws and this is what is happening now. Let's just observe to see how DJIA test the 200 DMA.

During my break, I went to take a look at the DJIA past history spanning the past one to two decades. A fall from the peak of around 14000 to 11600 seems to be a lot. But compared to the past history, this fall seems to be only a small blip on the chart. Currently, it has only decline 24% from the peak. Fundamentally, we may be in a bear market due to the subprime issue which cannot be solved within a few months. But technically, the market is not reflecting it with such a short decline of 24% only for the DJIA and nowhere we have seen the signs of a bear market. I would prefer to label it as a transition market. I do have my nagging fear that the next selling wave is coming soon. Well, what I am saying is just my speculation and I can be wrong :)

Dow Jones Industrial Average:


There is something interesting on the chart of the Straits Times Index. These days, I placed less emphasis on the STI now. The 3 indicators are showing 4 bearish divergences signals and these signals are of the strongest kind since the index made a new high but yet all 3 indicators showed a new low. So far in the all charting I did, I have never encountered such a situation before. Well, it looks nice on the chart though :) Will these 4 bearish divergences signal predict the next selling wave ? It can only tell us the probability of the next wave is rather high but it does not indicate when will this wave arrives. Let's see whether these bearish divergences will work well !

Straits Times Index:

Weekend review for DJIA and STI

This coming week will be a pivotal week for the Dow Jones as it is very near to a major resistance level. Such major resistance or support level offers a good reward to risk ratios for taking up positions. Major resistance level for the Dow Jones is around 12760 and volume has been declining for this current uptrend. Another bonus is that the A/D line and the MACD histograms are showing divergences. I will be watching the 12760 level closely to be tested successfully as a resistance level.

Anyway, i drew the vertical lines to show the divergences in the indicators more clearly. It can be seen that as price made a higher level. these indicators did not manage to breach their highs.

Dow Jones Industrial Average:


For the Straits Times Index, it is not converging well with the Dow Jones. It broke through it's prior resistance level though it seems to be done with declining volume. Currently there are no divergences in the STI and there is a continuation gap acting as a support at around 3064. My opinion on the STI is rather unclear now though.

Straits Times Index:

Signs of healthy retracement

Three days of black candlestick coupled with declining volume and one day of white candlestick with heavy volume is a technical sign of a healthy retracement. It will be prudent to keep a lookout once the Dow Jones is near major resistance which should be happening very soon.

Dow Jones Industrial Average:

Weekend review of DJIA and STI

Dow Jones look pretty suspicious to me. It seems like a healthy retracement is taking place with the declining volume being seen. On the other hand, I was expecting it to test the trendline as a supportive trendline with the retracement at least but it just fell through the trendline as though the trendline was not there. I am not certain about the direction as of now but it seems to me that the breakout of the resistive trendline was just a facade and this breakout did not carry on with strength.

Dow Jones Industrial Average:


I went to Bear's blog and took a look at his latest posting and his sentiments were the same as mine. It is strange that DJIA had 3 black candlesticks in a row while the STI had 3 white candlesticks. STI seems to be diverging from DJIA and i suspect this is due to the bullish sentiment in the s-shares. If that is the case, we should see STI converging back with DJIA soon. Once again, the breakout of the resistive trendline look suspicious since there was no volume to support the rally after the breakout. Maybe one should take a waiting stance first.

Straits Times Index:

Not just another technical rebound

Dow Jones broke out of it's major resistive trendline two closings ago and it ended with a doji candlestick. In my opinion, this is not just another technical rebound which we have seen for the past few months. Usually after DJIA ends with a huge white candlestick, the next day will likely to be a black candlestick but for this time round, we are only see a doji. However, the volume looks suspect since it is so light and this is not what is expected of a strong rebound. The next resistance level is around 12785 which was the resistance on two previous occasions.

Dow Jones Industrial Average:


For the Straits Times Index, it broke out of it's resistive trendline too and it was accompanied by heavy volume. There is a gap resistance at around 3000 but i think it should not be a concern since STI is quite bullish now judging by the volume and the gaps being formed.

Straits Times Index:

Weekend review of DJIA and STI

Currently, Dow Jones is near the major resistive trendline. I was expecting it to dip back to it's major support level after thursday black candlestick closing but it rallied on friday but failed to close above the major resistive trendline. Last friday's white candlestick was done with heavy volume so that adds to the risk of going short but on the other hand, since DJIA is now near the major resistive trendline, there is a good chance that it will rebound off this trendline. Furthermore, notice that for the last 3 days, DJIA failed to hold fibbonacci retracement of 61.8%.

Dow Jones Industrial Average:


For the Straits Times Index, the support level seems to hold and it remains to be seen whether the minor resistive trendline will hold as a resistance level. Otherwise, nothing much to comment since STI takes it's cue from DJIA.

Straits Times Index:


I been tracking Sembmar on my watchlist. Currently, it seems to have rebound off the major resistive trendline and notice that the black candlestick was accompanied with heavy volume.

Sembmar:

DJIA hitting major resistance

Dow Jones will be testing a major resistive trendline tonight and we shall see whether it can break through this trendline. This trendline has held for 3 occasions and that adds to the strength of this trendline. Candlestick theory will help to decide whether this trendline is likely to hold this time. I am watching out for a doji or an inverted hammer with long wicks this time. It will be a bonus if the Dow Jones can close slightly higher on green tonight.

Dow Jones Industrial Average:

Weekend review of DJIA and STI

I been busy with my school work so I have not been updated my blog for the past week which i apologize for that. For the past week, the piece of important news that came out was that the Fed will pump in money and that cause the Dow Jones to register it's highest gain in 5 years. On hindsight, i should have shorted the rally since following the rally, an inverted hammer was formed on the trendline following the breach of support for the descending triangle and i failed to see that on my chart.

Currently, DJIA is being resisted by a minor resistive trendline and this was done with heavy volume. DJIA is now in the middle of a major support level and a major resistive trendline. My trading strategy still remains the same as my previous post; short at major resistance or breach of support.

Dow Jones Industrial Average:


For the Straits Times Index, the chart is quite similar to that of the Dow Jones so I am not going to comment much on it.

Straits Times Index:


The next date to look forward to will be the Fed meeting which is on the 18th of March or rather, this coming tuesday. We shall see what happens next but I am beginning to have doubts of the ability of the Fed meeting to swing the market up and down since the market is getting relatively immune to it.

Weekend review of DJIA and STI

There has been some important movements for the Dow Jones. On thursday, it broke the 61.8% fibbonacci retracement support level. This means that technically speaking, we are likely to see it testing the January low level of around 11700 somewhere this week. The only thing is that the volume is not that heavy with this current dip so it's a minor thing in my humble opinion.

I dun profess to be able to predict the future so I reckon there are 2 ways which the DJIA can move in subsequent closings. 1st of all, the Fed meeting which can swing the markets is on the 18th of March which is 9 days away from the time of this post. During this period of 9 days, we should see DJIA dipping to around 11700 and hover for a while. It may swing up slightly depending on any rumors of the outcome of the Fed cuts but that is not important. If the Fed cuts are to the satisfaction of the market, we should see it bounce off the 11700 level to sustain a technical rebound. Likewise, if the Fed cuts are not to the expectations of the markets, we will see it break 11700 level into the middle of nowhere. This should conclude the macro trading strategy for the next 2 weeks. In short, if market bounces off 11700 level for a technical rebound, hold your horses for a while before placing a short at expected resistance such as the resistive trendline. If the market falls through 11700, capitalize on the downwards momentum by shorting it.

Dow Jones Industrial Average:


Nothing much for me to comment on the Straits Times Index. I'm just expecting it to hit the level of 2700 soon if DJIA break through it's support.

Straits Times Index:


SGX is looking very attractive to short. It broke it's January low of around $7.56 with heavy volume. Notice $7.56 has been a prior support twice and this looks like a good opportunity to short.

SGX:

DJIA on minor support

Dow Jones is currently supported at it's prior support level and the 61.8% fibbonacci level. Any break below this level and we will see it likely to dip all the way to the lows in Jan.

Dow Jones Industrial Average:


I was chatting on La Papillion's shoutbox when someone pointed out Swiber to me. A look at the chart reveals that it may be ripe for a short perhaps. We see the support level of $2 being tested twice in the past and now it is near this level again. Notice that the volume is picking up and if $2 is broken, one may place a short near this region.

Swiber:

Minor trendline testing for DJIA

Last seen on monday, DJIA formed a doji or a hammer candlestick on the minor trendline. This seems to suggest that a short-term support has been found. We just gotta see whether this trendline holds this time.

Dow Jones Industrial Average:


SembMar seems to be doing good except that it is doing great heading south. Technically speaking, there was a prior gap up at $3.58 and it is acting as a resistance level. Today, it tested this level successfully as a resistance level so this should be a good entry point for shorts.

SembMar:


I added a link to the Fed meeting dates since they are important dates which can swing the market. It's troublesome for me to google it and access that URL from the search results. Now i just need to visit my blog and I will know the dates straightaway :)

Weekend review of DJIA and STI

In my last post, i spotted a doji forming on a resistive trendline on the Dow Jones. And the very next thing was it rebounded off the resistive trendline and it closed very badly on last Friday's closing. I am more inclined to suggest that the candlestick for DJIA on monday should be relatively small since it is unlikely for very bad closings to repeat over and over again.

Currently, DJIA is supported on a minor trendline but last friday's candlestick was done with heavy volume so the move downwards should be relatively huge if it happens.

Dow Jones Industrial Average:


Currently, the Straits Times Index is forming a ascending triangle formation after rebounded off the resistive trendline. There is a slight MACD histogram bearish divergence. Similarly to the DJIA, there was a huge volume for last Friday's closing.

Straits Times Index:


I spotted quite a few counters trending with regularity. Sembcorp is one of those counters. It just rebounded off it's resistive trendline. Notice that there is a breakaway gap at $4.97 and we can use that as a resistance level to short. However, I think the current price has gone too far south so it may not hit this level again.

Sembcorp:

DJIA at pivotal point

Dow Jones seems to be at a pivotal point now. Prior support level has turned resistance level for now. Furthermore, DJIA seems to be resisted by a trendline and this is further confirmed by the doji formed yesterday. Let's see how it goes tonight.

Dow Jones Industrial Average:

Breakout from upside

Well, as the title of my post said, the bulls have won currently and this is seen in the breakout from the upside of the triangle formation which was formed over the past few sessions. This can be seen from the chart below

Dow Jones Industrial Average:

Weekend review of DJIA and STI

Actually there isn't much of a review to do for this week cos next week is the decisive week for the next subsequent trend. The earning report season which accounted for the rally last week is almost over. There will be subsequent US economic data being released along with the Fed meeting and that will be the deciding factor.

Well as a lot of technicians like to say, all news will be reflected in the chart. For the chart of the Dow Jones, it closed just below the resistive trendline last friday. There isn't much valuable information for me to gleam from the chart. Current trend is the market is showing indecisiveness since it has formed higher lows and a lower highs and that coincide with the news that the market should be waiting for next week before deciding on the trend.

Dow Jones Industrial Average:


The same goes for the Straits Times Index. Currently it is resting on a support level created by the previous two gap up. It seemed to rebound off the resistance at around 3150 but nothing is pivotal at this point of time. Let's see how the trend will be confirmed next week and we will be riding a trend hopefully soon.

Straits Times Index:

Ominous candlestick for DJIA

I spotted a ugly looking inverted hammer on the chart of the Dow Jones. Notice that the wick of the candlestick is very long and this adds to the potency of the candlestick. Basically, the inverted hammer tested the resistive trendline successfully. I am inclined towards a break of the downside of the triangle formation as mentioned in my last post.

Dow Jones Industrial Average:

Weekend review of DJIA and STI

Since my last post, there has been a short term rebound as mentioned in my last post from the point of technical analysis and there has been new development. What can we expect from the chart at this point of time ?

For the Dow Jones, it is now forming a triangle formation and this shows even strength between the bulls and the bears since the DJIA has been forming a lower high and a higher low. It will be prudent to see which side of the triangle it breaks out from. If it breaks from the downside, a new downtrend will begin and vice versa. The next support level will be around 11620.

Dow Jones Industrial Average:


Onto the Straits Times Index, the previous gaps down has been negated or covered back in the last few days. This is due to the bullish sentiment for the budget day thus for that few days before budget day, STI's movement is diverging from the DJIA. Now that the budget is out, the movement of STI is likely to converge back with the DJIA with the DJIA taking the lead. The next resistance level to watch out for will be around 3150 . There are also other resistances such as the resistive trendline which has been tested thrice and the 50d EMA.

Straits Times Index:


Sembcorp caught my attention since it is now at a pivotal point. The prior support level of $4.87 has now become a resistance level which has been tested successfully once so far and now it is near this level. At this level, it formed a hanging man candlestick which is bearish by nature. However, there is also bullish divergence in the A/D line and the RSI so it is conflicting in this sense. Whether it can break out from this resistance or bounce off this will probably depend on movement of the indices.

Sembcorp:

Poising for a technical rebound

From the looks for the Dow Jones chart, it seems that DJIA is poised for a rebound soon. Currently, it is residing on the fibbonacci 23.6% support level. The last 3 candlesticks had a long tails which resemble tweezers bottoms so in my opinion, these factors suggest a rebound should be near soon. The next resistance level will be around 12750.

Dow Jones Industrial Average:


For the chart of the Straits Times Index, it formed a island reversal formation and that signifies a downtrend. Following this, there was a huge gap down and this gap will be acting as a resistance level. Since i expect the DJIA to be rebounding soon, i believe STI will be following suit.

Straits Times Index:


However, both of the intermediate trends for both STI and DJIA are still down. Remember that the subprime issue is not something which can be resolved easily so i believe the coming rally will be still a technical rebound.