Technical Analysis of stocks in SG

Paper Trade of SuntecReit

2008-09-14T10:35:00.000-07:00

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

2008-09-06T00:21:00.000-07:00

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

2008-08-19T19:09:00.000-07:00

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

2008-08-16T13:05:00.000-07:00

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

2008-08-06T20:30:00.000-07:00

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

2008-08-03T09:44:00.000-07:00

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

2008-05-07T21:57:00.000-07:00

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

2008-05-04T09:31:00.001-07:00

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

2008-04-28T11:12:00.000-07:00

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

2008-04-27T12:42:00.000-07:00

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

2008-04-06T09:33:00.000-07:00

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

2008-04-01T09:33:00.001-07:00

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

2008-03-30T08:12:00.000-07:00

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

2008-03-26T06:54:00.000-07:00

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

2008-03-23T08:17:00.000-07:00

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

2008-03-19T08:35:00.001-07:00

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

2008-03-16T10:46:00.000-07:00

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

2008-03-09T08:36:00.000-07:00

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

2008-03-06T09:45:00.000-08:00

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

2008-03-04T08:14:00.000-08:00

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

2008-03-02T08:13:00.000-08:00

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

2008-02-28T08:29:00.000-08:00

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

2008-02-26T19:05:00.000-08:00

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

2008-02-24T09:27:00.000-08:00

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

2008-02-20T07:49:00.000-08:00

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

2008-02-17T09:06:00.000-08:00

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

2008-02-12T10:02:00.001-08:00

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.

Chart with regularity

2008-02-10T06:23:00.001-08:00

I spotted NOL forming a nice channel. Currently it's very near the channel resistance and this is a good opportunity to go short. Furthermore, the intermediate trend is down since it has been forming a lower high and a lower low. This chart is very similar to the chart of Cosco Corp too.

NOL:

Chinese New Year gloom

2008-02-06T08:51:00.000-08:00

First of all, a very happy chinese new year to all of you :) But i guess the festive spirit somehow did not spread to the markets.

For the Dow Jones Industrial Average, it broke out of it's rising bearish wedge formation and it closed with a shaven black candlestick with heavy volume. It is expected as it failed to broke through the resistance level that was highlighted in my previous posts. The next support level is likely to be at around 11620. This also register as another time where the Dow Jones failed to make a higher high.

Dow Jones Industrial Average:

For the Straits Times Index, it opened with a huge gap downwards below the psychological support level of 3000 easily despite STI opening only for half a day today. Next likely area of support is 2744.

Straits Times Index:

Cosco Corp seems like a prime candidate for shorting. It bounced off it's resistive trendline with a inverted hammer and it broke the gap support at $4.4. Furthermore, the A/D line is also showing bearish divergence. The likely support level or the target price is around $3.83.

Cosco Corp:

Yangzijiang seems to be ready to be shorted too. It broke out of it's triangle formation but it rallied back to touch the support now turned resistance trendline. Notice that it failed to close back above this trendline. However, this counter seems to be slightly riskier than Cosco Corp in my opinion since the support level is quite near.

Yangzijiang:

A week of whipsaws

2008-02-03T06:13:00.000-08:00

This week has been a week full of whipsaws. Whipsaws in technical analysis, in my own layman term is that price action seems to break through a crucial level but it only broke through slightly thus giving the impression that it has broken through it, only to discover in subsequent closings that it din go in the forecasted direction.

This can be seen in the Straits Times Index. There was a gap up previously and this act as a resistance. Subsequently there was a closing above the gap and it seems that this resistance has been broken but it headed south again. Now there was a gap down too previously and this acted as a support. The closing on thursday seems to suggest that this support has been breached but on friday, it managed to climb back to land on the gap down.

Straits Times Index:

For the Dow Jones, it has broken it's resistance level which was acting as a support previously. The channel seems to be forming a rising bearish wedge and it remains to be seen whether it will break out from the downside or from the upside.

Dow Jones Industrial Average:

I am tilting towards bullishness in the short term though i am still bearish on the long term. A higher low and high has been formed for the Dow Jones and a higher low was been formed for the STI. Furthermore, it seems all news has been discounted into the price action already and this is perhaps the recovery phase but I believe the market cannot recover back to it's previous high.

Ferrochina has been good for shorting since the testing of the gap at $1.46 has failed and the result is that this counter is plunging downwards. This price action of this counter is very regular and it might be worth taking another look.

Ferrochina:

Middle of nowhere

2008-01-29T07:39:00.000-08:00

Straits Times Index did not rally back to the resistive trendline that connected the previous 3 peaks or rather, it has not return back to test the resistive trendline yet. Gaps can act as technical levels of support and resistance. For the STI, it can be seen from the chart that the gap up is acting as a resistance and the gap down is acting as a support level and STI seems to be sandwiched between both gaps. Furthermore, the gap down is at the psychological level of 3000 points where a lot of speculators are sentimental towards this level. The trend can only be judged depending on whether STI breaks it's support or resistance level. However, i am still bearish since the rally a few days ago was a false one since it was done with declining volume.

Straits Times Index:

Weekend review of STI and DJIA

2008-01-27T07:57:00.000-08:00

This time i am using the weekly chart for the Dow Jones. This is because the minor trend is too volatile and it's hard to gauge the trend of the market. A weekly chart will give more confirmation on the major trend.

On the weekly chart, we can see that there is a well-tested trendline which has been acting as a resistance for 2 peaks and 1 time as a support level. It broke this trendline recently and there is a fair chance that it will go back to test this trendline as a resistance by showing a long wick on the candlestick before plunging again.

Dow Jones Industrial Average Weekly:

For the minor trend of the Straits Times Index, it seems to be bullish since it covered back the gap down as seen on the chart. Currently it is heading north on a very steep channel support line and i am expecting it to test the orange trendline which is similar to the DJIA. If it fails to break this trendline, things will be more bearish.

Straits Times Index:

Personally, if we think that last week was the worse that we have seen, i think it's probably wrong going by the sentiment i percieved so far. There was an article in the New Paper last week which did a sentiment poll on the speculators in the market. The result was that most speculators are still quite hopeful on the outcome of the market. We know that the bear market will end when most speculators feels totally hopeless about the market and they are unusually pessimistic so the worse is yet to come. If u look at the market from a 10 year view, this current correction is just like a small blip. A bear market lasts for around a year to two so i believe the onslaught will still continue.

Maybe i will just quote what one of my friends said,

" So stop hoping for a rebound and accept the fact that we are going down, maybe you'll feel better. Start saving up for the bigger picture!"

Ferrochina seems like a prime candidate to short at around $1.48. This is due to the following technical factors,

1. $1.46 was the level of the August low
2. There was a gap down at around that region
3. It correspond with a fibbonacci retracement of 50%

Ferrochina:

Market reversal

2008-01-23T08:14:00.000-08:00

Today, a lot of technical factors suggest that a market reversal has taken place. For the Dow Jones, it appears to pierce the February support level but it formed a hammer candlestick with a very long tail. This hammer was formed with very heavy volume and this increases the probability of it being a technical indicator showing a market reversal.

Dow Jones Industrial Average:

The Straits Times Index gap down on 2 closings ago and it opened with a gap up today. The gap down acted as a resistance technically and today's closing covered back this gap down and this is bullish. Furthermore, by candlestick theory, an morning star formation has been formed with heavy volume and this is bullish too. For the technical indicators that i have chosen, both the RSI and the A/D line are showing bullish divergence.

Straits Times Index:

Technically speaking, i am quite convinced that the market has reversed or is already reversing. Right now, i am just waiting for a higher high and a higher low. But i cannot forecast whether this will be the next bull run or just a longer term technical rebound simply because technical analysis is not a crystal ball which allows you to gaze into the future. Thus it is better to be cautious still. Personally, i don't think that the subprime issue is something that will go away easily and i believe it will still be an issue for this year so i am still expecting turmoil on the markets.

Weekend review of DJIA, STI and HSI

2008-01-18T22:06:00.000-08:00

Volume is an essential tool in technical analysis since in technical analysis, volume confirms price action and this was important tool for market action for the past week.

For the Dow Jones, it broke the August closing support level and is now heading towards the February support level. The striking thing about the chart is that as the index action plunges down all the way, the volume increases with this action and that is confirmation of a very bearish trend.

Dow Jones Industrial Average:

I took a look at the weekly chart and the chart reveals quite a number of things. A trendline was drawn connecting the peaks in 2006 and this trendline was a resistive trendline which turned into a supportive trendline for 2007. This trendline support was broken this week with very heavy volume and currently it is landing on the February support. Let's see whether this support will hold.

Dow Jones Industrial Average Weekly:

Since the Straits Times Index has been revamped with the addition of new components and a downsizing of the total number of components, i am playing safe by choosing only to evaluate the STI after the 10th Jan. The new STI in my opinion is less useful since it has less components though there are other new indices which were created along with the revamp of the STI which can overcome the shortcomings of the new STI. However, STI still plays a huge part since most speculators are still sentimental towards the STI. This can be seen in forums where people suggest that 3300 is an important support level though the STI has been revamped.

There was a gap down on 3 closings ago which can act as a resistance technically and this gap was not covered back so things are still bearish.

Straits Times Index:

The same goes for the Hang Seng Index which had a gap down but this gap was not covered back at all. However, HSI seems to be resting on the 200d MA.

Hang Seng Index:

Overall, i am still bearish on the indices. There is still no higher highs and higher lows for the indices. Furthermore, the volume has not decline yet although i must say that the market is getting used to the downfall. Barring a market capitulation, i believe in my humble opinion that there is still some more downfall to go.

Downtrend in process

2008-01-15T06:57:00.000-08:00

Today was another red day for the STI. Most counters were not spared and plunged heavily. However, there is always hope in this plunge as a lot of counters which are overvalued are starting to look cheaper and it's a great time to pick up counters. There is nothing technical about this. Times of crisis are always a good time to pick up fundamentally strong counters and even if one knows nuts about fundamental or technical analysis, there are still profits to be made.

Well, this blog is about technical analysis so i gonna give some my analysis on the current situation technically.

1. Today's volume is still very heavy for the counters in my watchlist. This shows that the selling momentum has not ceased yet thus this downtrend is far from over.

2. There were 3 days of intensive selling so i believe a technical rebound is on the way thus one may short on the day of technical rebound.

3. For price action wise, most counters broke their August lows and this is ominous to me. Most counters did not even attempt to test their August lows as a support level.

Personally, I do not try to pick a market bottom as the probability of me getting it correct is very low. It is much better to go long after the bottom has been confirmed technically. A bottom is probably near when,

1. The volume is getting lighter; Sellers are decreasing and there are signs of accumulation

2. Indices forming a higher high and a higher low.

A bottom is also considered to be over when market capitulation occurs. This is confirmed technically when the candlestick shows a hammer or a doji with a very long tail. U can take a look at the old STI for the August correction and this was what happened but i believe capitulation is a rare event.

Weekend review of STI and DJIA

2008-01-13T08:53:00.000-08:00

For the Dow Jones, the current channel resistance seems to be broken. However, the volume still remains to be very heavy so one should be prudent. DJIA seems to be building a base as we notice that the low of friday was higher den the low of on wednesday. As of now, it is better to wait for subsequent closings before deciding whether the bottom has been reached technically.

Dow Jones Industrial Average:

As for the Straits Times Index, chartnexus is not uploading the latest data anymore until further notice due to a revamp in the components of the STI. I'm not sure how long this will take though i am expecting the uploading of the data to be resumed in a few weeks time. Meanwhile, i am trying hard to find online charts of the new STI so if there is any websites showing the STI chart, do tell me about it.

A lot of charts broke their support on Friday's poor closing. There is one interesting counter though and that is yangzijiang. It is interesting because it is a fundamentally sound counter yet it plunged down with the rest of the counters on Friday.

It broke out of it's descending triangle formation with heavy volume. Notice that $1.86 has been a strong level of support so once this support is broken, there is heavy selling. The price objective approximated by the descending triangle formation is around $1.51. Coincidentally, $1.51 was the lowest closing support level in August thus $1.51 is likely to remain as a strong support technically given the confluence of the above two technical factors.

Yangzijiang:

November support breached for DJIA

2008-01-08T19:42:00.000-08:00

Dow Jones breached it's November support level on the latest closing with heavy volume and that is very bearish. We gotta wait and see whether it will hold the lows of August. But notice that if we consider the close only, it has already breached both the closings of August and November.

Dow Jones Industrial Average:

Weekend review of STI and DJIA

2008-01-06T07:31:00.000-08:00

Dow Jones did not hold the trendline dat i posted for my last post. It broke the trendline convincingly and now we are looking at at the Aug and Nov correction support levels again.

The level of around 12710 is the level for the prior corrections as seen on the chart and we shall see how DJIA approach this level. This level is a very significant level so there is some chance that it will bounce off this level by showing a hammer candlestick perhaps. If it breaks this level, it will be very bearish since this will result in a lower low according by Dow theory.

Notice that the trendline for the A/D has been breached and there is also a MACD crossover.

Dow Jones Industrial Average:

For the Straits Times Index, it rebounded off the resistive trendline. Similar to the DJIA,
the level of around 3300 will be a crucial level since it was the support levels for the August and Novemeber correction levels thus this level is likely to act as a support. We shall see how STI test this level too.

One thing is for certain and that is STI will gap down for the opening on Monday since DJIA closed so badly on Friday.

Straits Times Index:

Lian Beng broke out of it's historical closing level on last thursday and we saw a doji on friday. The candlesticks were unshaven which implies that they did not close near their highs so this does not give a good signal of a strong breakout. It is likely we may see some retracement back to $0.78 before the start of any other movement. $0.78 is a significant level since by technical analysis, resistance levels often converts to support levels. It was a resistance level twice thus now it has turn to become a support level. Notice also dat the volume has become light again.

Lian Beng:

For ChipEngS, it's hard to determine where it is heading. It is falling with declining volume and that is very typical of a flag formation. Gotta see what this develops into.

ChipEngS:

ChinaXLX broke out of it's resistive trendline on friday. This counter has been under my watchlist for a long time. It should land around the 50% fibbonacci retracement level which is also near the resistive turn support trendline.

ChinaXLX:

Construction sector in play ?

2008-01-02T08:45:00.000-08:00

I noted ChipEngS aka CES on the top movers section today. It closed with a white candlestick with heavy volume. As seen in the chart, CES broke the resistive trendlines today. It seems to me that this looks like a triangle formation.

ChipEngS:

Another counter is Lian Beng which is approaching it's historical closing level. It closed with a shaven white candlestick with it's volume picking up but failed to break above it's historical level. On the weekly chart which i din post it, it seems to me that the volume has been decreasing steadily and dat looks suspect to me.

Lian Beng:

Both counters are trending on breakouts so DJIA's performance tonight will be important. A positive closing of more than around 1% for the DJIA will signify that the counters will gap up tomolo on opening and it may be possible to ride on the momentum.

DJIA is holding on the trendline drawn in my chart for the last post but contary to my expectations, it fell through the 200d MA. Like what Decipher said in his blog, DJIA may be poised for a rebound from this trendline so let's see how DJIA close tonight.

Start of the new year !

2008-01-01T09:10:00.000-08:00

This will be my 1st post of the new year ! :) Quite excited about it though i can't say the same for the markets now.

For the Straits Times Index, it closed well with a shaven white candlestick with a heavy volume. Notice that STI only opened for half a day, so i consider that volume to be relatively heavy.

However, STI broke it's channel support 2 closings ago and notice that it rebounded off the resistive trendline. We shall see whether STI will break this trendline in subsequent closings. Meanwhile, STI is still forming a higher high and a higher low.

Straits Times Index:

Weekend review of STI and DJIA

2007-12-29T09:36:00.000-08:00

By the Dow theory, a higher high and a higher low is confirmed for the Dow Jones thus an uptrend is still in place despite the dips recently. I believe DJIA should rebound off from it's current level technically.

DJIA has tested the 200d MA and has successfully close above it for the past 2 closings. Furthermore, the formation of a doji candlestick suggest that a short-term bottom has been reached. Moreover, DJIA now lies on a trendline that was drawn connecting the prior two higher lows thus i believe DJIA will not dip anymore beyond this level technically.

Dow Jones Industrial Average:

What is being said for the DJIA is different for the STI. The Straits Times Index tested the 200d MA on thursday and failed to close above it and i consider that to be bearish. Notice that this also rebounded off the resistance trendline drawn connecting the prior two highs. There was a prior small gap up which will act as a support technically so there is a chance that STI will dip til this level. However, for both the DJIA and STI, the trading volume still remains light overall.

I am still bullish overall going by the charts and if one still believes that the DJIA is a leading indicator of the STI.

Straits Times Index:

Rally led by retailers

2007-12-26T07:39:00.000-08:00

Dow Jones broke above the 200d MA and along with the other MAs used in my chart, namely the 50d and the 100d MA and that is a bullish sign. Next resistance will be the prior peak level around 13767. Overall, it's a good sign that DJIA is finally recovering.

Dow Jones Industrial Average:

I do have more observations on the Straits Times Index. STI is still below the 200d MA but given that DJIA is now above the 200d MA, STI should be testing it soon subsequently. Next resistance level will be the prior peak level which is at around 3621. A breakout above this resistance will result in a double bottoms formation technically.

Today's trading volume was exceptionally light though it was a full trading day. The 2nd last closing's volume was light because STI only traded for half a day. This would mean that the rally was led by the retailers and the funds are still not back yet and that does not sound very good to me. I can't predict when will they be back though most speculate that they will be back after the new year. However, it will be reflected in the chart technically.

Straits Times Index:

Anyway, congrats to all those who bought near the November prior support level. That support level held and those who had bought den should be sitting on some profit buffer now :)

AdvSCT caught my attention on my list of charts. The level of $0.935 is an interesting level. Notice that there were 2 prior gaps up on the chart at this level thus they are acting as a support at this level technically. Furthermore, the level of $0.935 was tested successfully as a support level by the candlestick tweezer bottoms. This level should be safe to buy in.

AdvSCT:

Weekend review of STI and DJIA

2007-12-23T07:34:00.000-08:00

This post will be a very simple one. The Dow theory worked relatively well in the previous corrections though by the time it is confirmed, it is a bit late in catching bottoms. Rather it can be used to confirm bottoms. A higher high and a higher low will confirm a uptrend and a lower high and a lower low will confirm a downtrend.

For the Dow Jones, it can be seen from the chart that a higher low has been confirmed. Going by how it pierces the peak of the index action, a higher high has also been confirmed thus this implies that a uptrend is in place. Notice that the latest closing was done with heavy volume.

Dow Jones Industrial Average:

For the Straits Times Index, a slighter higher low has been confirmed and a higher high is also in the making. Thus this should signifies a uptrend is taking place.

Straits Times Index:

Analysis of some counters

2007-12-21T08:54:00.000-08:00

It's weekend again and christmas is coming. Seems to me that the market is bullish today as a lot of counters rallied.

Yangzijiang rallied up today with heavy volume and that is a good sign. Furthermore, there is bullish divergence in the RSI. Notice that the $1.86 level proved once again to be a crucial support technically as it bounced off from here. Next resistance will be the confluence of the 50d and 100d MAs and the prior top of $2.19. A breach of the $2.19 resistance will result in the formation of double bottoms.

Yangzijiang:

ChinaAOil has been in my watchlist for a long time. Notice from the chart that the level of $1.97 has been a strong support technically and it seems to have test the support successfully this time too. However, the volume seems low today so i guess it's better to observe further.

ChinaAOil:

Dow Jones haven close yet as of now so i will be posting on what i think about the indices tomolo :)

STI taking a break

2007-12-19T07:43:00.001-08:00

A lot of counters tested their November lows today again and some of the counters did not make it this time round. However, it seems to me that the STI is holding well at the support level mentioned in my previous post.

Yangzijiang seem to have broke it's strong support of $1.86. It closed at $1.85 today so it might be prudent to wait for the next closing to confirm that the support has been breached.

Yangzijiang:

China Hongxin broke the 200d MA and the trendline and that is extremely bearish. I placed a long today, only to see it breach it's support level during the day to my surprise. So in the end, i got out by taking a small loss near the closing. I believe this counter should plunge all the way down and it is a prime candidate for shorting.

China Hongxin:

A Merry X`mas indeed ?

2007-12-18T09:00:00.000-08:00

Yesterday, i saw the Dow Jones broke the 200d MA and i tot that was ominous enough. To my surprise, STI and HSI did not plunge further but STI rallied instead. Now as i am looking at the Dow Jones, it opened on a gap up. I must say i was quite taken aback since usually Dow leads the HSI and STI and now the vice versa has happened.

STI was supported on the previous support level made in the Nov correction. Today's volume was heavier den the previous down days and that is good. That is a good chance that it may hold at this level.

Straits Times Index:

Today, a lot of counters tested their November correction level successfully. This represent a good chance to enter at a good reward to risk ratio. Nothing is absolute in any analysis so if this November correction level fails to hold, it will be time to get out to limit losses. Below are some counters which are at a strong level of support.

China Hongxin is supported on the 200d MA and a trendline that goes all the way back to March. Notice that this trendline has been tested 4 times successfully and these are signs of a valid and a strong supportive trendline.

China Hongx:

For the STX PO, the level of $2.59 has been a important level. It started off as a resistance level in July before this resistance became a support level in Sepetember and November. It tested this level successfully today. However, this is a very volatile counter as it can move up and down a lot of bids in a single trading session.

STX PO:

Downtrend continues

2007-12-17T18:51:00.000-08:00

Dow Jones broke the 200d MA on the latest closing and that is very ominous. It closed with a nearly shaven long black candlestick.

Dow Jones Industrial Average:

The Straits Times Index covered back the previous gap down with another huge candlestick and that is bearish. There are some important support area that is going to be tested soon. They are the previous dip made in november and the orange trendline.

Straits Times Index:

I spotted Celestial testing a very important support level of $1.03. Notice this level has been tested successfully thrice and it stretches all the way back to June last year. At this point of time, it is testing this level so we shall see how it goes.

Celestial:

I just sold off my position at a small loss. Right now, i will be taking a break of few days cos my mind and my heart is not ready to look at any charts. Guess it is better to stop and reflect on my mistakes den to plunge straight in and make more irrational decisions. For a start, it's been very tiring to hold on to my losing position and i should have gotten out earlier. Now i will just wait for the market to bottom before picking up counters at their succesfully tested support levels.

2nd STI and DJIA weekend review for Dec

2007-12-15T09:38:00.000-08:00

It's been a turmoil for this trading week and to be honest, i did not expect this to happen. I din think it will retrace so badly but i guess i gotta change my mindset and go with the market.

The Dow Jones suffered a huge drop on the latest closing and the volume was significantly heavy. It closed near it's low but notice that it closed around the level of the previous two lows. Currently it is near the 50% fibbonacci retracement level and it will be testing the 200d MA. Short-term wise, the current level should hold but it is always prudent to wait for it to bottom out.

Dow Jones Industrial Average:

It's a bad week for the Straits Times Index. It breached the 200d MA and covered back one of the previous gap down. The support trendline for the RSI has been broken. The next level of support will be an another previous gap down as gaps can act as support.

Straits Times Index:

Monday's opening for the STI will be a gap down for most counters due to DJIA's poor closing. It's a reminder not to buy so early as i can see in the CNA forum that quite a lot of people got vested in the previous 2 days. It is better to watch for signs of reversal technically like the easing of selling momentum and the drying up of volume though volume has been very low recently.

I have learned a lot from my recent position in Yangzijiang and i think my lack of experience is starting to show. I took up a position after deciding technically that a bottom has been reached in the middle of November. Indeed, i was correct in calling for a bottom. I actually had a chance to take a 10% profit in Yangzijiang. For my other buy calls such as China Hongxin, there was a chance to take a profit of around 20%. But i din sell as i wanted to ride the trend. But alas, i should have taken a profit even though it's small cos the market is still volatile and this is where my lack of experience is showing. Decipher did that when he took his profit off the market as he knew that the situation now is not suitable for riding on the trend and i respect him for doing that. That's the difference between someone who has more experience den the other.

Furthemore, i am expecting myself to take a 20% profit before liquidating my position so when that did not materialize, i did not liquidate but stubbornly held on to my position. Now i know well that it is better not to expect anything but just see the situation first before deciding rather den hang on to the notion of wanting to have a profit of 20%. The market is not my ATM. If it gives me this much, i should just take it.

On thursday, the closing fell below the channel support but i still held on stubbornly in the hope that it will bounce back. The next day which was Friday, there was a chance for me to sell off during the opening when the price reaches it's high of the day but i still held on in the hope that it will rally somemore. In the end, the closing was lower den the opening and i lost a good chance to liquidate. I should have been disciplined enough and sold when the channel support is being breached. Anyway this happened to my previous stops too so i must change my mindset and sell the moment the technical signals suggest so instead of waiting for a while.

On Monday, i will be exiting my position with a small loss. It is frustrating when u see ur profits turn to loss but i guess i got no choice. But at least i do learn something from this. I think i will be taking a break of few days from the market to sort out my mind and my psychology. Meanwhile i will be sidelining until i can see the technical signals for a trend reversal is back. There is no point in forecasting since one cannot be absolutely sure. It is better to ride the trend when the trend is back.

For a sidenote, Yangzijiang is a very good fundamental stock. Notice it is one of the new stocks to be included in the revamped STI which i think will be used starting from the 8th of Jan for next year. For now, the overall market volume is low simply because the funds are not back yet. So far, those stocks which are removed from the revamped STI has been sold already. I am wondering when they will buy back. Thinking from their point of view, i will probably let the price action dip even more to let retailers dump their holdings out of fear. Then i will come in and accumulate watever they dump at a cheap price. I think maybe my view is too simplified so comments will be appreciated :)

It is not easy to be a good trader or investor. Success requires hard work and to be able to learn from mistakes. Still got a lot of stuff to learn but i believe i will be there someday. I would end this post with a quote,

"When u start to pray and hope, u will lose"

Buying momentum still not back

2007-12-12T06:14:00.000-08:00

Today was a pivotal day as we observe the impact of the outcome of the Fed meeting. Apparently, the rate cut was not enough and the markets opened with a gap down.

The Dow Jones closed with a huge black candlestick and landed on the 100d MA thus the 100d MA is the support for now.

Dow Jones Industrial Average:

The Straits Times Index opened with a gap down but managed to close higher den it's opening with a small white candlestick. However, it is noted that the volume is still very light.

Straits Times Index:

It seems that what i hoped for did not come true in the end. The Fed meeting did not bring back the buying momentum because the rate cuts were not enough. This can be seen in the extremely low volume for the STI today.

Overall, i am still bullish cos technically speaking, the uptrend for both the DJIA and the STI is still intact. In fact, i think today is a good day to load up simply because due to the rate cuts, the market is grossly oversold today. Furthermore, though most counters opened with a gap down today for their openings, the selling did not persist and most counters regained some ground. This shows that there are still buyers out there. I guess i just gotta have some more patience to hold on.

IndoAgri seems to be looking bearish. Currently it is now supported on the trendline but both the MACD and the RSI are showing bearish divergences as they trend lower while the price action still trends higher. Furthermore, it seems that the volume overall is drying up as seen in the yellow region as we compared to it's previous rallies where there were huge spikes in the volume. If Indoagri breaks this trendline, chances are that it will plunge further.

IndoAgri:

On a lighter note, i realised i made some mistakes for my weekly charts. For the period parameter of the RSI, i should have use 8 or 9 weeks instead of 14 weeks. It is no wonder that my weekly RSI lines were so smooth :) After changing it to 8 weeks, the RSI seems much more useful as i spotted bearish divergences just before the previous few corrections. Those bearish divergences were not present when i set the period to 14 weeks. I set it to 14 because on the daily chart, i use a period of 14 days thus it din occur to me that i should change it to 8 or 9 until i reread my technical analysis books. Think i should tweak my MACD parameters on the weekly chart. That solves the great mystery on how come i think that the RSI is so useless on the weekly charts :D

Players watching by the sidelines

2007-12-10T08:59:00.000-08:00

Today's volume was very light. I woke up just before noon and saw that in the top volume list, majority of the counters did not even hit 10k in their trading volume. I guess that a lot of people are sidelining the market.

Quite a lot of counters dip today and the dip was quite significant. What was strange was that the dip was on very low volume and that showed that there were very few buyers to push back the price. It was only during the end which some of the counters recovered back some ground. I'm not that worried about the dip cos it was on low volume. The market's sentiment now hinges on the outcome of the Fed meeting so it's quite pointless to discuss anyting until the outcome is revealed. One may take a bet now and place a position in the market or just sideline and watch the show :)

For the Straits Times Index, it formed a hanging man candlestick today which is bearish by nature but overall, it is still supported on the 100d MA.

STI and DJIA weekend review

2007-12-08T22:55:00.000-08:00

Dow Jones tested the 61.8% fibbonacci retracement and failed to close above it. A break above this retracement level will mean that the DJIA will probably go all the way north to it's October's peak. Furthermore, it has broken the trendline that i drawn which connects the previous 2 peaks and that is a good sign. Overall, things are still going well on the charts.

If the DJIA should retrace, it is likely to land at the area of yellow region highlighted in my chart and that is due to the 100d MA and the current channel support in the yellow region.

Dow Jones Industrial Average:

For the Straits Times Index, it found support on the 100d MA. It is still some distance away from the trendline that i drawn connecting the previous peaks. Given the DJIA has broke that trendline, i think STI should break this trendline soon.

Straits Times Index:

Overall, i feel that the markets is definitely not as volatile as the previous 1 to 2 months ago. Things are starting to look much more predictable and boring perhaps though i would say the buying momentum is still not back yet. I hope that the outcome of the Fed meeting will bring back the buying momentum to sustain the end of the year rally. I noticed in my charts, most of the counters have rebounded off their support already but are still some distance away from the resistance levels thus buying on breakouts of resistance is still a risky move.

Meanwhile, there was some news released over the weekend that China raise their reserve ratios and the implications of it is that the s-shares will take a dip on Monday. For a start, i dun buy on news but rely entirely on technical analysis only. Maybe that piece of news explains why some of the s-shares in my charts open on a gap up but covered back their gaps and close below their gap for friday's closing which i tot that it was pretty surprising given DJIA's strong closing on thursday. Perhaps this is yet another example of price action comes before news :) If i were to buy on news, probably it will be too late since there are definitely some privileged individuals who knew of this piece of news before the general public knew it and started to dump their shares before the weekend.

Yangzijiang's progress

2007-12-07T08:41:00.000-08:00

Yangzijiang is looking good for it's uptrend. It tested the prior gap up made 3 closings ago with light volume sucessfully today. Furthermore, the gap up coincide with the 100d MA and these 2 factors suggest that the gap acts as a strong level of support. The next resistance will be at $2.29 and that will be the target price. We should see this being reached by the next Fed meeting if rates are being cut. With some luck, it may even breakout from the $2.29 level :)

Yangzijiang:

Rain doused off the bears

2007-12-05T08:53:00.000-08:00

Today's rally was a surprise to me given that the Dow Jones din move much at all for the past few closings. I guess somehow the heavy rain today made the bears all went into hiding as the STI rallied strongly today :D

For the rally today, STI tested the 100d MA again and failed to close above it. The last test was 3 closings ago. Notice that the 100d MA is near the level of the previous gap down so this forms a level of resistance. Furthermore, the combination of the last 3 candlesticks formed a tweezer tops and currently, i would establish the next level of resistance that is to be broken to be around 3580.

I dun think it's much of a problem since STI has already formed a higher high and a higher low. By Dow theory, this signifies a uptrend as stated in my previous posts.

Straits Times Index:

Asia Env has finally covered the gap down made in late july at around $0.80. That in itself is a piece of bullish news. Today's closing was strong as it closed with a long shaven white candlestick with heavy volume. This counter has been in my watchlist for the past one or two months when it showed bullish divergence with all the 3 technical indicators that i used when it was at around $0.675.

Asia Env:

Another surprise for me was that Golden Agri breakout against it's resistance trendline ! It really took me by surprise as i reckon that technically speaking, it should head south in my post yesterday. I must admit i made a bad call for this counter although i dun think my analysis is that flawed . Well as i always like to say, the market is always right and opinions can be wrong so my opinion is wrong this time. If u have a 2nd opinion about this counter or if u wana point out any mistakes i made, u can drop me some comments in the shoutbox to help me out :)

Golden Agri:

Kiss of death for Golden Agri

2007-12-04T08:06:00.000-08:00

I spotted a classic chart today and that is Golden Agri. This counter has been trending upwards very well along with Wilmar and IndoAgri for the past one or two months. We can see in late Oct, it broke out of it's channel resistance and this resistance trendline turn support subsequently. It broke this support trendline 3 closings ago and today it tested this trendline as this trendline changes from support to resistance. U can see how this counter tested the trendline by forming a 'wick' on the candlestick and that's what i call as the kiss of death. Furthermore, the volume was very light today. So technically speaking, this counter is likely to head south.

Golden Agri:

For indices-wise, everything is going as i expected. Currently there is no retracements and it has been closing flat for the past few closings. We should see some movement soon.

Recovery of the STI

2007-12-02T05:33:00.000-08:00

As an overview, the market have seem to recover from this current correction. Both the Dow Jones and the STI showed signs of recovery as they tested their support levels.

DJIA tested the 200d MA on the last closing and managed to close above it and dat is a good sign. Although the candlestick dat is formed is a hanging man which is bearish going by candlestick charting, i think overall it is bullish because DJIA broke the 200d MA on thursday and the latest closing confirms that the DJIA is able to stay above the 200d MA. Furthemore, there is a MACD crossover and that is bullish.

Dow Jones Industrial Average:

STI showed bullishness as it gapped up for it's previous 2 openings. The volume for the last closing was very heavy and that is a good sign. Furthermore, there is a MACD crossover which was similar to the DJIA. Next resistance for the STI will be the region around the 50d and 100d EMA which happens to coincide with the 38.2% fibbonacci retracement.

Straits Times Index:

Overall, i believed that the market have bottomed out last week as they tested their previous support levels successfully. A lot of charts in my watchlist dipped to their support levels and they managed to hold their supports and some of my charts which had a double tops formation turned out to be a bull trap as they failed to follow through their formation. Last week was a good week to load and hold counters for the short term and it is time to go long.

China Hongx is now near their support level. This support is especially strong since it falls on a trendline which has been tested 3 times so far and the 200d MA. This will be a low-risk counter to load in.

China Hongx:

Yangzijiang tested the $1.86 level three times with relatively significant heavy volume and it closed above this level thus this level proves to be a strong support. Currently it is forming a triangle formation and it showed bullish divergence with the MACD and RSI technical indicators. We shall see whether these indicators work well :)

Yangzijiang:

Moving nowhere for a while

2007-11-28T06:54:00.000-08:00

The market seems to have establish some kind of support level as of now. For the Dow Jones, basically it tested the level of around 12740 twice and this level will act as the support for now. It closed with a rally on the latest closing with significant volume and that is good.

Dow Jones Industrial Average:

For the Straits Times Index, there was a upside gap 3 closings ago and this gap was tested sucessfully in the sense that it did not close below the gap and dat is bullish. One thing that puzzle me was that though DJIA rallied up on the latest closing, STI failed to close up higher. But as of now, STI has established a support level with the tested upside gap.

Straits Times Index:

In my humble opinion, i reckon selling pressure or the momentum have eased off already. STI fails to move up cos there is no buying pressure as the sentiment is still mixed. So what can change the sentiment of the market and that is, to convince people to be buyers again ? That will depend on the outcome of the next Fed meeting which will be coming soon in Dec. That outcome will be reflected in the charts by the index moving north and that is if the Fed cut their rates. Hopefully, if they cut their rates, buying momentum will resume and i can start to ride the trend again.

Another formation failure

2007-11-27T06:57:00.000-08:00

Bio-treat formed a confirmed double tops and it should be going down south. But today it rallied up and broke it's previous support line. Another stark reminder of formations do fail and one should have a cut loss principle in place. There is much more to technical analysis den just formations.

Bio Treat:

STI forming a channel resistance breakout

2007-11-26T08:39:00.000-08:00

Actually the above title is not surprising. Like what i mentioned in my previous posts, if Dow Jones fails to break it's channel resistance, there is no way STI will break theirs. So DJIA has broke out of it's channel resistance so thus, it is only natural for STI to broke out of their channel resistance.

Today's closing was quite good. Opening was by the retailers since STI increase quite significantly at the opening and only increase slightly towards the end of the day. Volume done was quite significant though not that heavy. Whether this will translate to the next bull run, i am not sure though the breakout of the channel resistance is quite a piece of good news. Next technical signal for uptrend of the index will be to look out for a higher high and a higher low to be formed before i will go long.

My opinion is that since all bad news have been released and has been discounted in the charts, this shld be the end of the correction unless more new bad news is being released. However, time and time again, opinions can be wrong and the market is always right so i will just follow the market. It is almost impossible to try to catch the bottom so i am in no hurry to catch the bottom. I will be keeping my fingers crossed. We shall see whether a higher high and a higher low will be formed in the next 2 weeks.

Straits Times Index:

Additional opinion on the Dow Jones

2007-11-25T07:50:00.000-08:00

I took another look at the weekly chart of the Dow Jones Industrial Average today again. The weekly chart is more important den the daily chart technically. It seems to me that there is a chance that this correction may be over.

Dow Jones seems to be supported on the previous resistance now. On the latest closing, it tested this previous resistance turn support level with a hammer like candlestick so i am slightly more bullish now. Let's see whether this support will hold.

Dow Jones Industrial Average Weekly:

Another likely technical rebound for STI

2007-11-24T09:59:00.000-08:00

The closing on Friday for the Dow Jones was interesting to some extent. There were 2 important technical factors that can be gleamed from the chart. The first would be that DJIA form a breakout of the channel resistance. DJIA has been trending in this downward channel for the past month and a breakout of the channel resistance seems to be a piece of bullish news.

However, if one takes another look at the volume, u can see that the volume was extremely light. For this closing alone, volume does not confirms index action thus the rally was not a 'true' rally.

If we looked at the previous drop in Aug, we can see that there was a hammer formed with an extremely long tail. I browsed through the CNA forum and some of them shared that on that day itself, there was panic selling so the index dip til a very low level. The funds took advantage of this and decides to load in at a cheap price and that explains the very long tail and the heavy volume. So right now, i guess this is not happening. I am not suggesting that history will repeat itself but if this happens again, it can serve as another sign that a bottom has been reached.

Since the volume was very weak for the latest closing, i will wait for another closing to be sure.

Dow Jones Industrial Average:

I think there is no doubt that STI will rally on monday. That is because DJIA rallied on friday albeit with extremely light volume thus STI will follow the DJIA. The threads in the CNA forum are always a good indicator to gauge the market sentiment. I noticed that the market sentiment for the retailers are bullish thus the rally on monday for the STI will be led by the retailers on the opening. STI may break it's channel resistance too on Mon. Whether the funds will start to buy in, i guess we gotta observe further.

Straits Times Index:

My CFD account is finally ready and i can short counters now but it may be too late. The next best opportunity will be that DJIA fails to hold it's previous support level in Aug. This will cause the STI to break it's support of 61.8% fibbonacci retracement level. Once a index or counter break this retracement level, there is a high probability that it will do a 100% retracement. But i think that this is not likely to happen. It seems to me that all the bad news are being released already and have been discounted in the index so i dun think the chances of this happening will be great. Monday will tell us whether the breakout of the channel resistance was valid. If it is not valid, both DJIA and STI may tank and this may be a good chance to short.

Bio Treat formed a double tops on Friday and it was confirmed with a gap down and a shaven black candlestick. I think it should decline even more in subsequent closings but i guess it will take quite some time.

Bio Treat:

Downtrend of the market continues

2007-11-21T10:07:00.000-08:00

It is noted that there were 5 attempts for the Dow Jones to break the current downtrend channel resistance but all attempts were futile. The downtrend is still continuing. DJIA is going to reach a pivotal point soon where it will test it's previous support level on 16th Aug. Den we shall see whether DJIA will rebound off this level.

I think i kind of given up hope on technical indicators. Or rather, maybe they dun work well for this situation. There were positive divergences signs on the technical indicators i used. A/D line is showing bullish divergence in the long term and RSI refuse to head south despite the drop in index action. But i have been seeing this for quite some time already but the index still refuse to head north. Now we have the MACD lines piercing the previous support level and this implies selling momentum is still going on.

Dow Jones Industrial Average:

The chart of the Straits Times Index mirrors the DJIA. If DJIA fails to break it's channel resistance, u can see STI has no chance of breaking it's own channel resistance too. Currently it is supported on the 61.8% fibbonacci retracement. I drew the retracement wrongly but the level of the lines for the fibbonacci retracement levels are still correct. If it falls below 61.8%, it is likely STI will retrace all the way. It is noted that the RSI is way too oversold already but RSI can remained well oversold in a trending market as it does not work well in a trending market.

Straits Times Index:

So my conclusion is the downtrend is still continuing. All depends on DJIA. Currently, it can't even break it's channel resistance so i reckon the bull is still sleeping in the market and hiding somewhere.

I decided to review the 2 counters that i posted last week.

Bio-treat did not took off as expected since the market sentiment is still bearish. Now it is back at it's previous support level.

Bio-Treat:

Asia-env is showing a lot of strength. Everytime it tries to head south, there will be buying coming in and this can be seen in the tails being formed in the numerous candlesticks. Notice how it can rally up despite the current bearish market sentiment. Price action confirms all 3 bullish divergences in technical indicators.

Asia-Env:

AdvSCT formed a rising bearish wedge and it was confirmed when it broke the support trendline. I tot the chart is quite nice so i gonna put it up. After all, it is not everyday that i get see a wedge formation.

AdvSCT:

One of the gurus in the channelnewsasia rallyartist's thread shared with us a great insight into reits. I am gonna just post it below.

something to share about investing in reits. reits is a long term investment instructment. as the price get rammed down, the yield becomes more attractive. in STI market, the average yield is 5% for reits, which is pretty much better than CPF special account interest rate and of course FD rate. note long term i mean time frame of at least 10years. in general reits are defensive stocks as they are backed by the phsyical asset they own. the "correct" way of investing in reits is buy a portion first, get the dividends and reinvest back the dividend to buy more of the reits at lower price. STI market has been very nice to reits investors as many just treat reits like normal stock, play it up and play it down and this has given reits investor always the opporuntiy to buy at lower price. average down on reits is nothing wrong.

as you compared the current price of reits now and perhaps 6mths ago, 6mths ago, it was like only a handful of them are giving a yield of at least 5%, perhaps like 40% of the total reits only. at current price, it is like 70% - 80% of the reits now are able to fetch you at least 5% in term of yield.

some ask what to do in stock market when bear market starts, if you are vested in reits, those good one, in bear market you will be still getting dividends. this is the good thing as compared to normal stocks whereby come bad times, companies no earning, where have dividend for you; exception of defensive stocks like sph.

similarly for funds, come bad times, they will be vested in defensive stocks with good dividends so that they have something to give to their clients.

i suppose many need to tune their mindset to "real" investment in order to survive a bear market if it really comes. in bear market, even you holding lot of cash also no use, put in the banks, what type of rate you can get ? might as well dump into defensive stocks and get the better dividends as compared to putting in bank for that peanut interest.

i also need to stress is that for reits, price appreciation is not a primary factor but rather the dividend yield is.

I opened my CFD account today and i am ready to short soon. But in view of my impending exams, think i wun be exercising this right so soon. Gotta concentrate on my exams !

Oscillating like a wave

2007-11-18T06:31:00.000-08:00

Dow Jones rebounded off it's channel resistance for the latest closing. The weak rally on friday failed to breach the channel resistance line. Furthermore, it tested the 200d MA but failed to close above it. Now i guess Dow Jones will rebound off it's channel support line in a few days time but as of now, it is still quite far away from the channel support so Dow should decline further in the next few days.

Dow Jones Industrial Average:

As what i mentioned in my last few posts, the chart of the Straits Times Index look almost like the Dow Jones, except that it seems to be lagging a bit. So if Dow Jones rebounded off it's channel resistance, chances are that STI will decline in the next few days until it touches the channel support. As of now, we can see from the chart that the STI has rebounded off it's channel resistance.

Straits Times Index:

It's a good time to be go short indeed. I notice most of the china stocks have breach their support and are falling like there is no tomorrow. I guess it's time for me to enquire more about CFDs and open an account to take advantage of the situation.

End of technical rebound

2007-11-15T20:49:00.000-08:00

Dow Jones bounced off it's channel resistance yesterday night. This means that the rebound is only a technical rebound and not the start of a bull run. Next possible action is that the Dow will head back towards the channel support. Since Dow closed badly, i believe STI should also rebound off it's channel resistance today.

It feel almost eerie that the simple concept of trendlines work so well at times. I drew the blue line connecting the previous 2 tops of this current downtrend. It's such a strange thing that the Dow Jone rebounded off this line after it touches it as if that Uncle Dow knows that it must rebound off this line dat i have drawn :p

Dow Jones Industrial Average:

Technical rebound has arrived

2007-11-13T17:54:00.001-08:00

I wanted to post yesterday night but i had problems putting up the charts with Blogger yet again so i din post. But i guess it was good in some ways as i can blog about the technical rebound for the latest closing of the Dow Jones.

The Dow Jones rallied strongly last time with by rebounding off it's channel support with a long white shaven candlestick with heavy volume. The technical rebound which i have been expecting has arrived finally. The technical indicators have already suggested that a rebound will take place soon since the MACD histograms and lines have touched the prior levels and the RSI seems to be showing bullish divergence as it has been trending sideways while the index suffered a huge drop.

Dow Jones Industrial Average:

For the Straits Times Index, it should be supported at it's current level due to the confluence of the 200d MA and the fibbonacci retracement level of 50%. These are some of the strongest supports that are used in technical analysis. Furthermore, the MACD histogram have now touched the prior correction level.

Straits Times Index:

Even though the technical rebound is here, this may not spell the end of the correction. Both the Dow Jones and the STI may rebound off their channel resistance so we gotta see what will happen subsequently. Only a higher high and a higher low in index action can confirm that a uptrend is back in place.

Currently i am looking at a few counters. These are asia env and bio treat. These counters are not likely to rally up a lot since they are not in play. What attracts me is that despite the 3 dowm gaps that the STI has suffered for the past few days, these counters dun seem to display a gap down and is still maintaining a sideway trend. Furthermore, they are showing bullish divergences with their technical indicators and are now both supported by trendlines or their previous support level.

Asia Env:

Bio Treat:

Uncle Dow is falling down

2007-11-11T07:24:00.000-08:00

The last friday closing for the Dow Jones took me by surprise. Before that, there was a hammer candlestick formed on the trendline and the 200d MA. The hammer tested both of these and it managed to close above it so technically speaking, i believe that was the bottom of the correction. However, the Dow Jones closed with a huge black candlestick and it closed below the 200d MA. The 200d MA, as i said in my previous post is an very important moving average line as it determines whether the major trend of the market is up or down. The last time, it dip below the 200d MA was in Nov 2005 and that was like 2 years ago.

The next support level for the Dow Jones should be around 13800 and that was the level which the previous correction at around 22nd of Oct had fallen to. Short-term wise, we should see a technical rebound in the next few days but bear in mind, that the market is still downtrending. It can be seen from the blue line that the Dow Jones is now forming a downtrending channel and it is right at the support level or the lower trendline that of the channel. Thus the Dow Jones should bounce off this trendline going by the chart.

RSI is showing bullish divergence. I have drawn the lowest level of which the MACD lines have fallen to in the previous correction in Aug as a gauge to judge when will this correction ends. If the MACD line touches around this level, it can act as a technical signal that the correction should be ending soon. For the MACD histogram, i have also done the same thing. If the technical indicators are conflicting each other, i will just look at the index action and volume since all technical indicators are derived from these two factors.

Dow Jones Industrial Average:

Nothing much for the Straits Times Index. Basically, it follows the Dow Jones closely. As we all know now, the Dow Jones close badly on Friday so i doubt when we open later, we will rebound back.

Currently, STI seems to be supported on the 100d EMA and it closed with a gap down. STI is also showing RSI bullish divergence. I also done the same thing for the MACD lines and histogram as i did for the Dow Jones chart. I noticed that the charts for the STI and the Dow Jones are very similar except the STI seems to be lagging by the Dow Jones.

Straits Times Index:

Meiban Gp had a breakout with relatively heavy volume. It opened with no gap down despite of the fact that STI and a whole lot of other counters opened with a gap down. What was impressive was that near the closing, a married deal of 870 lots was done and that pushes up the price. Furthermore, there was no heavy selling towards the closing. I actually think that this is a potential counter but given the current bearish market sentiment now, i will be giving it a miss. Besides, my exams is drawing near and i should be looking at my engineering notes instead of the charts :)

Meiban Gp:

STI saved by a holiday ?

2007-11-08T11:42:00.000-08:00

The Straits Times Index was indeed saved by the Deepavali holiday. Dow Jones closed with a huge black candlestick. Given the volatility and the sentiment of the local market now, STI would not be spared from a drop if it had open on holiday.

Looking at the Dow Jones, the long black candlestick seems to be supported on a trendline which was drawn from around one year plus ago and one which has been tested thrice so far. Close to the trendline, there is a red line beneath it which is the 200d MA. The 200d MA which acts as a strong support or resistance, is a gauge on whether the market is a major bear market or a bull market. Any close beneath it will signify that the market is in a major or at least a intermediate bear sentiment. Furthemore, we can see that a higher high and a higher low has been formed and this means that currently, Dow Jones is in a short-term bear market.

In my opinion, due to the confluence of these technical factors, i.e the support of the trendline and the 200d MA which are close to one another, Dow Jones will be supported around the 13200 region. Any break below this will be disastrous. I dun have the volume displayed in ChartNexus for the past 2 closings so i'm unable to tell whether this drop was significant or not.

Dow Jones Industrial Average:

For the Straits Times Index, i said long ago that there was a possibility that the index may retrace back to do a double bottoms. I guess it is happening now though it was faster den i expected. Currently, STI is supported on the 50d EMA and RSI has hit it's prior correction oversold level so STI should hold around the level of around 3630. Given the current market sentiment now, it is hard to gauge whether this support will hold around 3630 since STI is now driven mainly by the Dow Jones and the HSI. This situation now for STI is more of a "see how it goes before taking any action" kind of situation.

Straits Times Index:

On a personal note, i dun have a good feeling about the market sentiment now. It is like the market is slowly dying instead of dying a sudden death as in the case of a major correction. Counters are slowly dipping back to their previous support levels. I just have this nagging feeling that something big is gonna happen soon.

There were some interesting reads on the CNA rallyartist thread. One of the gurus, ccloh noted something is happening for the counters Wilmar, IndoArgi and GoldenAgri which are linked together. These 3 stocks are in play now and they often rally together. Below as what he observed:

"suspecting these ang mos are trying to swtich their fund out from defensive counters temporary to help pump up the price for those 3 counters. why i suspect that. as the name mentioned defensive stocks, their price range won't move much even fund are selling. once they pump up the price of the 3 of them, sell with a gain, they can always come back to buy back those defensive stocks practically at not much the price they are being sold. why they need to do that ? the ang mos are having their backyard caught in the fire with the subprime, they dont have excess fund to pump in and obviously they want to get some "profit" from here to fight the fire back at home."

I guess this is something no amount of charting can tell u about. This is done by using 'tester' lots. This thread has been an interesting and an informative read for me and i have learn stuff through it :)

OSIM creeping up slowly

2007-11-05T08:47:00.000-08:00

I spotted this counter in my watchlist. It has been closing at it's high for the past 2 days with volume picking up. And furthermore, it has been able to close strongly despite the drop in STI today.

Osim:

Volume not confirming STI's drop

2007-11-05T08:05:00.000-08:00

A basic tenet of technical analysis is that volume must confirm price action. If the price goes up, the volume must increase otherwise, chances are that this increase in price is likely to be short-lived and vice versa. The drop in the Straits Times Index was not accompanied by heavy volume. If it was accompanied by heavy volume, it is likely to be panic selling.

We can see that STI has landed at the level of around 3630 and that was the level of the previous drop. Thus this drop is now currently acting as a support for STI. Furthermore, the close of STI is at the 50d EMA so technically speaking, i believe STI will not drop further. The closing of the Dow Jones later must also be taken in consideration since STI is following the Dow Jones closely. In my previous post, i believe Dow Jones will not drop further as it is now supported on the 100d EMA. Thus my outlook for the market is neutral now.

For the counters, i noticed there were a lot of black candlesticks formed but their volume was not heavy so it's ok. Another interesting thing was that ChinaMilk seems to be defying the trend by gaping up and closing higher but it does not appeal to me on the chart.

Straits Times Index:

Weekend review of stock market

2007-11-03T02:50:00.000-07:00

For the latest closing, we see the Dow Jones forming a huge black candlestick with heavy volume and that is bearish. To be honest, from the technical analysis point of view, it seems to me that there was no technical signs that the Dow Jones is going to suffer such a huge drop. There was no bearish divergence or any breaks in trendline. The only consolation was that since the Straits Times Index takes it's sentiment for the opening from the Dow Jones, we can always use the performance of the Dow Jones to roughly gauge the performance of the STI.

Dow Jones was supported by the 100d EMA on the previous dip. This time round, it has closed slightly above the 100d EMA while testing it. There is a chance that it will be supported on the 100d EMA this time round.

Dow Jones Industrial Average:

Straits Times Index suffered a drop and open on a gap down due to the poor closing of the Dow Jones. This is a sign that the sentiment of the STI is still quite linked to the Dow Jones. STI was supported on the 50d EMA on the previous drop so there is a chance that the 50d EMA may act as a support. But there is still a small distance between the closing and the 50d EMA. Another possibility is that the STI may form a double bottoms.

Straits Times Index:

Last friday was a good day to filter out potential stocks. This is because both the STI and the Dow Jones perform badly that day. If we can find counters that defy the index and still move upwards, those counters are very bullish indeed since they can ignore the sentiment of the market. Some of the counters i spotted includes Lian Beng, AdvSCT and Straits Asia and CH offshore.

Currently i am looking at CH offshore. I was tempted to buy on friday but i decided to be disciplined and wait til near the closing to see if a breakout above $1.01 was confirmed. $1.01 is a strong resistance level and has been tested numerous times but all attempts failed to close above it. A close above $1.01 will be very bullish.

CH offshore:

Uptrend continues

2007-11-01T07:31:00.000-07:00

The outcome of the Fed meeting was that the interest rate was cut. This resulted in the Dow Jones heading north by quite a significant amount. But to my surprise, STI did not gap up and closed with a black candlestick. Perhaps, the market had factored in the cut already so it did not went up strongly.

Some charts and their price action caught my attention today. Lian Beng was in the top volume list throughout and it broke a trendline with significant volume. Furthermore, there was another bullish technical signal and that appeared in the form of the MACD lines having a crossover. The chart reminds me of China Hong though since both charts are very similar.

Lian Beng:

CH offshore tested the $1.01 resistance today and failed to close above it. The $1.01 is a strong resistance line which has been tested a lot of times but it failed to close above this. Going by the short-term channel, it broke above the channel with very high volume and that is bullish. Furthermore, there is a MACD line crossover and that is bullish too. I am now waiting for a close above it with high volume.

CH offshore:

A bet on the market

2007-10-31T06:46:00.000-07:00

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

2007-10-29T08:21:00.000-07:00

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

2007-10-27T09:06:00.000-07:00

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

2007-10-25T09:08:00.000-07:00

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

2007-10-23T08:56:00.000-07:00

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

2007-10-22T08:49:00.000-07:00

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

2007-10-20T10:17:00.000-07:00

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

2007-10-19T09:33:00.000-07:00

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

2007-10-17T08:21:00.000-07:00

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

2007-10-16T07:24:00.000-07:00

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 ?

2007-10-15T09:14:00.000-07:00

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

2007-10-13T09:23:00.000-07:00

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

2007-10-10T07:30:00.000-07:00

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

2007-10-09T07:45:00.000-07:00

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

2007-10-08T09:09:00.000-07:00

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

2007-10-06T09:44:00.001-07:00

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

2007-10-04T06:59:00.000-07:00

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

2007-10-02T07:54:00.000-07:00

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

2007-10-01T09:25:00.000-07:00

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:

Picks of the week

2007-09-29T06:58:00.000-07:00

Time for my weekend review again. For the short-term, the upwards movement of the Dow Jones is not confirmed by the declining volume. It closed with a black candlestick with relatively heavy volume so there is a bit of bearishness. In my opinion, there is still some way to go before the Dow Jones test the important resistance of around 14026 so i am currently feeling slightly bearish regarding the movement of Dow Jones.

Dow Jones Industrial Average Chart:

Regarding the Straits Times Index, i must admit i was a bit surprised when it reaches a new high despite the Dow Jones not doing so. Due to this, i was quite reluctant in buying for last week. So far STI has been diverging from the Dow Jones and ever since i started this blog, the movement of STI almost always parallel that of the Dow Jones so it's been a learning experience for me.

Currently STI is supported on it's previous resistance at around 3652 and a successful testing of this level confirms this. Since no index history can be referred to as STI hits a new high, the next resistance level can only be estimated by Fibbonacci retracement which i will post on my next few posts.

Straits Times Index Chart:

Quite a number of charts in my watchlist are ripe for a trade entry. Some have already taken off last week like ChinaKangda, Singtel, Ausgroup and Fibrechem. Below are some potential counters in my opinion which is strictly based on technical criteria.

ChinaAOil Chart:

There is a breakout of the resistance level at $2.53. Notice how the previous 2 white candlesticks were accompanied by very heavy volume. The only thing that is worrying is the divergence of the A/D line.

Delong Chart:

This is a new one which i never posted before. This counter looks good in my opinion. A confirmed ascending triangle formation with heavy volume looks bullish. Furthermore, the previous drop in price was accompanied by a A/D line bullish divergence. The only stumbling block is the downside gap which was not closed at near $3.43.

Sino-Env Chart:

This chart looks like the Delong chart except that there is an addition of a MACD lines crossover which is bullish. MACD crossover lines are reliable indicators but they tend to be either early or too late to indicate a buy signal.

Breaking through the roof

2007-09-27T06:44:00.000-07:00

STI broke it's resistance level today with great volume and that is extremely bullish. This week has been a good time for picking up counters indeed. 2 of the 3 counters i mentioned in my previous post are heading north like what i forecasted using technical analysis but i was not in any of them so it's a shame indeed.

Straits Times Index Chart:

ChinaKangda caused me a lot of heartache. I told a fren of mine to place a long cos a double bottoms was confirmed using technical analysis. But somehow i did not enter cos i was hoping that ChinaKangda will retrace back to the level of $0.42 with low volume and this level will offer an excellent opportunity for a trade entry. However, this counter just flew off the roof and i was left behind. I tink it's better to vent my frustration out through blogging here den to buy another counter on impulse without being clear-headed. If i am to survive in the market, i must control my emotions and not let it affect my analysis and any decisions that i am going to make. So this is it ! I am going to leave this heartache behind in this post and continue to look forward to make more profits in the market.

ChinaKangda Chart:

A shooting star

2007-09-25T10:28:00.000-07:00

STI currently resisted at the previous resistance of around 3652. Given that it formed a shooting star on today's closing, it is not likely to break this resistance level in the short term though this resistance in my opinion is a minor resistance level.

Strait Times Index Chart:

Dow Jones currently trending sideways as seen by the rectangle and it is supported on the shaven long white candlestick made 5 closings ago. Nothing conclusive to say about Dow Jones as of now.

Dow Jones Industrial Average Chart:

Start of a new week

2007-09-24T09:04:00.000-07:00

STI formed a shaven white candlestick which is a sign of bullishness since it managed to close at it's high of the day. I am unable to get the volume of the closing for today so can't really confirm the strength of this candlestick. STI is now quite close to it's resistance level of around 3691. I notice that this previous upside gap occurred after this uptrend has been underway for some time already so this may be an exhaustion gap which is not good but as of now, nothing is confirmed yet.

Straits Times Index Chart:

A lot of charts seem to be ripe for a trade entry so i will post some charts for reference here.

Chartered seems to be forming a base pattern. RSI and MACD are showing bullish divergence so this counter may perhaps be moving north soon. The 3 resistances line formed by the 50d n 100d EMA and the 200d MA are the only things that make me cautious.

Chartered Chart:

ChinaKangda has been appearing in the top movers section. Today it formed a confirmed double bottoms with a breakout of resistance. However, the volume dun seem to be heavy so it may be prudent to wait for subsequent closings.

ChinaKangda Chart:

Singtel has retraced back to the $3.7 level for today. This is a classic case of resistance turned support as $3.7 was the highest resistance level reached in Feb and Aug this year. It should be a low-risk trade entry since strong support is confirmed at $3.7.

Singtel Chart:

STI not following Dow Jones

2007-09-22T08:34:00.000-07:00

Dow Jones has been heading north for the past few closings and we can see that the volume has been rising too so volume is confirming index action and this is healthy indeed. Currently, the support is near 13700 and hopefully we will be seeing it testing the 14020 region soon.

Dow Jones Industrial Average Chart:

The Straits Times Index dun seem to be following the movement of the Dow Jones and i am finding this very puzzling. STI reacted 1st to the Dow by having a huge gap upwards and it has been heading south slowly ever since. Let's see how STI test the upside gap in subsequent closing and see whether it finds support on this gap.

Straits Times Index Chart:

I dun post frequently on the SESDAQ chart but today i took a look at it. There was a gap formed in August and this gap was tested not long ago but it failed to close the gap. It will be significant if the gap is closed in future closings.

UOB SESDAQ chart:

I also took a look at the sector indices today and this is also something which i only do occasionally. I realise quite a lot of the sector indices are not moving up with STI despite the gap up. However, there were a few exceptions and one of them was the TSC sector. I tink it stands for transport, services and something else. Dunno what does the C stands for so if u can tell me, i will appreciate it :) The TSC sector is not only moving north, it has also broke it's previous resistance level. And another thing was that Jiutian and STX PO are inside this sector so this sector may be worth an another look.

I been visiting rallyartist's blog frequently and i realise he has not been updating recently. Den i went to the thread he starting in channelnewsasia and i found out he is in some kind of trouble. He posted on his experience and the actions he took that led him to the state he is now. It's a pity since his analysis was fantastic. Maybe the thing that struck me was how he turn 5k into 35k using technical analysis and it's proof on how technical analysis really works. I really learn quite some stuff from his experience and his thread can be found on http://forum.channelnewsasia.com/viewtopic.php?t=73861&highlight=

Breaking through the ceiling

2007-09-19T06:29:00.000-07:00

Today seems to be good looking at the charts. For the Dow Jones, we can see from the chart that it has broke the stubborn resistance of the level of around 13700 and it broke with high volume. That is certainly bullish in my opinion.

Dow Jones Industrial Average Chart:

On the chart of the Straits Times Index, it seems to be pretty good. For the latest closing, STI closed with a huge upside gap which i haven seen for a really long time. However something disturbs me and that is the doji-like candlestick or perhaps a hanging man that was formed today with heavy volume. I reviewed the list of counters that i was monitoring and i hardly see any white candlesticks or any bullish divergence. Black candlesticks and especially dojis or hanging man were seen more frequently instead. Maybe the list of counters i am monitoring is not exhaustive enough but i can only come to the conclusion that quite a lot of ppl are selling into strength today. Well, perhaps i may be wrong.

Straits Times Index Chart:

It just occurred to me that i often distort the reading of the charts with the things i hoped for. I am hoping for the return of the bull quickly so i must say this is affecting my analysis of the chart. Perhaps, it is bad timing on my part that i pick up technical analysis on this last leg of the bull run so i guess i just have to be patient. Watching now for a higher high and higher low with volume expanding with increasing index action and vice versa.

F&N chart showing retracement

2007-09-17T08:19:00.000-07:00

Currently, F&N chart showing retracement on light volume. $5.21 has been tested successfully with the low of today touching it and the counter managed to close above it. It's a classic example of a retracement with light volume in technical analysis and this offers an excellent point for a trade entry.

F&N chart:

Late weekend review

2007-09-16T10:37:00.000-07:00

I been busy with my academic stuff for this week so i din post on sat night. Besides that i do tink that i am blogging too much for the sake of blogging so from this point onwards, i am only going to post if i think that it is necessary. Blogging has been a way to show myself that technical analysis works and to keep track and make a record of my forecasts. I will definitely still post regularly but not so much for the sake of blogging anymore.

Nothing much to say about the Dow Jones. It's been doing well in my opinion. There is a chance that it may form a hanging man but this has to be confirmed on the next closing. Otherwise i am seeing it as a successful testing of the 50d EMA. The sentiment of the market is reflected in the charts so i must say it seems to me people are generally optimistic about the coming release of news in a few days time going by how the charts look. Main thing to watch will be the resistance level of around 13700.

Dow Jones Industrial Average Chart:

Following the breakout of the wedge formation, STI is still trending higher. There is some weakness in the STI given the formation of a shooting star on the latest closing. Otherwise, i am just gonna repeat what i been saying and that is higher index action not confirmed by increasing volume thus one should stay cautious.

Straits Times Index Chart:

On a personal note, i do notice that a lot of breakouts of resistance are not breaking out successfully on the list of counters i am monitoring. Maybe this is a consequence of volume not confirming index action in the STI.

Downside gap as resistance

2007-09-13T08:59:00.000-07:00

I noticed something which i overlooked before in the chart of STI. There was a downside gap in late july and this is now acting as resistance. But the downside gap is quite small actually to speak of. Another thing is a reminder to myself, and that is the overall increase in index is not confirmed by increasing volume. In fact, volume has been decreasing steadily. Since increase in index is not confirmed by volume, one should remain cautious.

Straits Times Index Chart:

I noticed that a quite lot of charts in the list of charts which i am monitoring seem to have bottom out and are rebounding already. I do believe this rebound should last til the period where STI and the Dow Jones hit their major resistance level which i mentioned in my previous posts.

Charts dun lie

2007-09-12T08:12:00.000-07:00

Today DMX Tech rocketed up towards north. I posted this chart a few weeks ago when it was showing huge A/D bullish divergence from price action. From candlestick charting, i knew that there was a great chance that it has bottomed out as it tested $0.44 for many times and 2 dojis were formed. I din expect it to rebound back so fast. Woah !

DMX Tech Chart:

Contary to what i expected, F&N broke through the triple resistance of the 50d and 100d EMA and the 200d MA. The market is always correct and i am wrong. Now F&N seems like a good buying opportunity now with those 3 moving averages acting as support. A retracement with low volume would be an excellent point for a trade entry.

F&N chart:

Safe for a little while

2007-09-11T08:34:00.000-07:00

True to my forecast, the shaven candlesticks formed on previous closings held as support as the Dow Jones closed with a doji-like candlestick testing the level of around 13040. Thus a higher low is still not being breached by the latest closing. This is quite bullish to speak of.

Dow Jones Industrial Average Chart:

Looking at the chart of the Straits Times Index, there seems to be a breakout of the wedge formation and today's closing pierced the resistive trendline. The good news is the volume dun seem to be light today. However, i feel the trendline may not be that valid so in order to prevent whipsaw, i should wait for tomolo's closing. Otherwise it should be a good time to enter but with caution.

Straits Times Index Chart:

I tink this might be late news but i do tink that the shipping sector counters is in play perhaps. I notice STX PO and Jiutian have heading north recently. But they rose much faster than i expected. Currently i am waiting for it to retrace back but perhaps it may not happen at all. I posted some charts but i will not been commenting on them at the moment.

STX PO chart:

Jiutian Chart: