Picks of the week

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

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

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

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

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

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

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

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

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

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

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:

Monday blues unlikely

Today the Straits Times Index gap down but it close higher den it's opening. Notice how it gap down and got supported on the trendline so this trendline dat i drew is valid. Gotta see how STI test the downside gap in subsequent closings. Given the lighter volume accompanied with a gap down formed today, I believe STI should trend upwards in the short-term.

Straits Times Index Chart:

F&N chart

A good friend of mine alerted me to this counter and he tink this counter is worth shorting.

1. The 50d EMA and the 200d MA are acting as resistance
2. 38.2% Fibbonacci retracement acting as resistance too
3. $5.21 has been tested thrice and price action failed to close above it
4. A/D line fails to make a new high

F & N chart:

Weekend review again !

It is the time of the week to forecast the probable trend for next week yet again. I usually post on Sat cos on friday night, the Dow Jones still got one more closing to go, so there is no point to do any review since the Dow Jones always lead the Straits Times Index.

Anyway i did read up on Decipher's blog which is the blog named art of growing money yesterday. He dun post that frequently in his blog nowadays but he wrote a very detailed and good post on his blog for his latest posting. I am learning quite a lot from his latest posting and he is offering some insights which i have missed in my charting.

For the Dow Jones, it closed with a long black candlestick with heavy volume on the latest closing. Furthermore it broke the 50d and 100d EMA in one single closing. However a higher high and low has been confirmed so going by Dow theory, we are in a theoretical bullish phase though in my opinion, this is a weak bull phase.
I noticed that a few closings ago, there were a pair of black and white shaven candlesticks. These candlesticks can act as short-term support going by Japanese candlesticks charting so i drew a horizontal line at this level. Furthermore this level is the level where the higher low occured so this may act as a support again.

Dow Jones Industrial Average Chart:


For the Straits Times Index, a breakout of the wedge formation has been confirmed following a breakout above the 1.5 years old trendline. But notice how the volume has been declining so volume is not confirming the price action. Thus this bullish phase can be considered to be weak. The index is now above all the important EMAs and MAs so this is quite significant. If STI finds support on the trendline by forming a bullish candlestick on it, it may be a good time to place a quick long.

Straits Times Index Chart:


Honestly, i was getting ready to place a long if the Dow Jones did not break it's horizontal support near 13252. But alas it did so i am not going to review any counters. I do think that there is a chance to make a quick profit cos we are in a bullish phase though it's weak one. Longs may be placed but i think one should exit the moment the Dow Jones and STI hit their major resistance level. That will correspond to a DJIA level of near 13700 and a STI level of 3650.

"The market will exist longer than you so dun be afraid of losing out on any opportunity for there will always be opportunities coming your way."

Signs of recovery

Things are certainly looking better now. Looking at the chart of the Dow Jones, it found support on the 50d EMA. Notice how it closed with heavy volume and a higher high has already been confirmed since the latest closing has exceeded the prior high. Volume has also been increasing. The next test will be the 13700 resistance level.

Dow Jones Industrial Average Chart:


For the Straits Time Index, the chart is also looking good. It closed with a shaven white candlestick with heavy volume so this is a good sign. However the closing happens to close just below the 1.5 years old trendline so a close above it, like what i said in my previous few post, will be very significant.

Straits Times Index Chart:

Beginning of the week

Nothing interesting on the charts yesterday so din blog yesterday. Well, the market has been singing the same tune for the past one to two months so i am really doing lots of waiting now.

I spotted something on the STI chart today. The level of near 3406 is now acting as resistance. Coincidentally, the 100d EMA is near that level too. So there are two levels of resistance acting around the same level so this is one tough resistance to break.

I notice how STI has tested this level for the past 3 closings by having a high that reached that level but it failed to close above this level. If it can reach that level and failed to close above it, i consider this to be bearish. If it break above that level, that level will likely be a support level for the next few days. Notice also how the volume is also very light for the past 2 days but i am not drawing any deductions from this piece of information. Now i'm just waiting for a higher high to happen.

Straits Times Index Chart:

Weekend review

Kinda sad to see mimosa restricting his blog to invited guests only. He has been offering very good analysis of the market and i often visit his blog to learn more stuff. Well, i just lost one source of learning about the market :(

Looking at the chart of the Dow Jones for the friday's closing, it managed to break the resistive trendline that was being resisted on 3 occasions and found support near the 100d EMA which happens to correspond with the support level of 13252. This is definitely a good sign as now we have seen the Dow Jones making a higher low and it has closed above the 50d EMA. The next resistance is at 13700 so there will be some chance perhaps to add in counters and hold until the Dow Jones reach 13700.

Dow Jones Industrial Average Chart:


The chart of the Straits Times Index also displayed quite similiar technical factors as the Dow Jones. As said in my previous forecast, the STI closed between the 38.2% and 50% fibbonacci retracement. Looking at the chart of STI, i saw something which i haven seen for a long time and that is both price action and volume are increasing together. I consider this to be quite bullish as volume and price are valued technical indicators in classical technical analysis. Any increase in price action should be accompanied by increasing volume. However, this was only for the last 3 closings so more observations over the subsequent closings are needed. A close above the 50d EMA and the trendline would be very significant.

Straits Times Index Chart: