Hi-P pattern failure

Dow broke it's resistance of 13707 and close strongly above it. This is significant as the level of 13707 was resisted on 3 previous occasion so a close above it is definitely a good sign. On to the STI, although it ended with a black candle, it managed to close at 3660 which was the previous resistance twice so i reckon this level will hold as support for some time.

Anyway back to the Hi-P chart posting i made, i must say it has been disappointing. Despite a confirmed double bottoms with a strong close above the previous resistance, it fell below this resistance with increasing volume as the price dwindled downwards. A decrease in price with increasing volume is definitely bearish. It has been a learning experience since i could not see definite any technical signs that would lead to such an outcome. Once it broke $0.98, i knew something was definitely wrong already. Now currently finding support at 50d EMA and the trendline but the drop from the point of breakout to the current price is already around 5% so a pull out will have to be made strictly according to the trading rules.



This left me pondering with the question and that is should i buy on dips when it's retrace back to the neckline or buy immediately on the breakout. The thing is that not all breakouts will dip back so if u dun buy on the breakouts, u will miss on riding the uptrend. So far, i observe that dips back to the neckline are quite common since due to the selling by traders or investors who got stuck on the previous resistance level. Well, missing out on riding a uptrend formed by a reversal chart pattern ain't easy especially when u know and u know that chart patterns have a high probability of forming a reversal pattern. But den, there will always be stocks to buy lah so miss one stock can always buy some other stock in the future :)

DMX-Tech : Spotted a breakout of an ascending triangle. By far one of the common patterns seen by me so far. Noted that the 50d EMA crosses above the 100d EMA a few days ago.



Currently looking at steel and property sectors. :)

Eating humble pie

I must say this weekend of mine was really fruitful i guess .. Stumble upon a few other blogs and articles in the papers and learn quite some stuff already. 1st of all i came upon a letter written to the Straits Times by Chua Soon Hock on 6 Jul 2007 in the forum. Should post here for my future reference.

HAVING made a living as a fund manager and trader for the past 25 years, I have seen the general investing public hurt numerous times when they invest aggressively near the peak of a bubble, whether in stocks or property.
Retail investors should adopt a very long-term horizon to benefit from the stock and property markets.

The starting point of major stock investment or purchasing a property for investment is important. Always try to start major investments during a recession, a global market crisis, a banking crisis or when nobody is interested in stocks, like during the Sars period.

The art of investing can be broken down into three quantitative variables of time, price and size. Investors should pick a ‘terrible’ environment/time when prices are distressed and commit big (but definitely without leverage).

The opposite is also true. In a very bullish, ‘good’ environment/time with high prices everywhere, investors should reduce the size of investments and ensure that whatever is outstanding is getting smaller and smaller.

Forget about wanting to liquidate all investments at the top of the market. It is an impossible task.

The basic idea is to invest aggressively (without leverage) near the bottom and get out when markets are euphoric, like now, even if they could go higher and carry on longer.

Global imbalances are currently at an extreme, making the environment ripe for a market crisis like Oct 19, 1987.

Markets (individual share and property) will go up and down over a long period of time, although the general stock index hides this truth as new, strong shares always replace old, declining shares over the years, giving you a misguided view that the index always heads much higher over time.

As Singapore markets become globalised with much foreign participation, Singaporeans would do well to be patient and courageous by investing near the bottom of the down cycle and selling to foreigners near the top of the up cycle and repeating this process.

If you have missed the huge bull market, that’s just too bad. Now is not the time to jump in aggressively as the risks are increasing exponentially.

Bull and bear markets always repeat themselves, just like summer and winter. Be very patient and do your homework.

You do not need to be a genius to make money in the markets. You need common sense, discipline and a clear long-term workable plan, without which the markets are like a hot fire and will burn fingers.

Chua Soon Hock

There has been a lot of news recently in the papers regarding stocks. Tink one or two days ago, an article was written in the New Paper regarding a uncle whom i tink is a retiree who plonked in $20000 into stocks and he has zlich idea on wat is going on in the market. He buy based on discussion with his frens and newspapers report. I been talking with my dad recently regarding the market and consensus is that literally everyone be it uncles or aunties know that the market is really way overbought at this moment but still $$ are plonked into the market. Reminds me of how the last phase of the bull market is described and that everyone in the public is vested. Greed is all around in the market be it in stocks or property sector. Perhaps one last piece of reli solid advice for me and that will be :

Be greedy where there is fear and be fearful when there is greed.

Perhaps at this moment, i am too being slowly consumed by greed. Can't reli help it when u see tat the stuff u been learning reli works in the market. Well, maybe it is a good ting that i can't be vested since i will only have funds after august. Hopefully, the bear market will start den but den i am gona graduate in 2 years time !! Later no job how sia ?? :-/


The second thing was that i stumbled upon another trader's blog at rallyartist.blogspot.com. It's reli a great blog since i learn abt how the BBs can make $$ from the market. Very interesting indeed. Haha ..

But the most important thing was his observation on the STI. He looked at the major trend and realised that even trendlines from a few years before are affecting the prices now since at this stage, prices repeatedly failed to break the trendline formed from a few years ago and that is very significant. There is reli nothing rocket science abt this cos it is just the drawing of trendlines but nonetheless it is someting to watch out for and maybe it's time for me to get the 10 years stocks data :) Just gota be as objective as i can and not let emotions decide my decisions.

Back onto the indices, today STI tested 3672 and failed to break through this crucial resistance, closing with a nearly shaven black candle with a high volume. From a rising bearish wedge to a probable head and shoulders, i wonder what can be nxt ? But as for now, it ain't rosy news. Dow is going to test the crucial resistance of 16383 soon and we shall see how it turns out bah. UOB Sesdaq made a new high today. For as long as i remember, penny stocks has been hogging the top volume list. That reminds me of blues chips and penny stocks take on rotational plays which is someting i learned abt and from now i will oso monitor the UOB Sesdaq too ! :)

Another take on the STI

A very bearish possible Head and Shoulders forming in STI.

Markets showing weakness

Now i guess we are in the phase of rebounding from the correction. The problem is this rebound seems to be weak. Looking at Dow Jones, a higher price today reached yielded a low volume which is a sign of bearishness. For the STI, after rebounding from a morning doji star, it failed to penetrate the previous trendline and it close with the same price with a high volume.





I noticed that the construction stocks i been monitoring are showing weakness. Been noticing Yongnam, Lian Beng and CSC which have given me the greatest gain since a few weeks ago, i spotted all 3 forming a bullish reversal pattern. Spotted dark cloud covers and a doji for them today. Not sure whether it is due to the indices. Maybe if the indices can recover, they will cheong up but not that sure cos i never experience this kind of situation b4.

OSIM appear on my radar too. Today got a surge up with a high volume. Haha, not that sure why but dun have to noe la. Now trading at near 0.7 from a high of 2.1. I will carry on monitoring it. :)

Stockbroking house ?

Dunno whether my eyes playing trick on me or what, i saw 2 days ago that UOB-KayH, Kim Eng and GK Goh broke their recent resistance with high volume. Tot it was too much of a coincidence so din bother much. Current situation is both 3 made new highs. Anyway these 3 stocks are stockbroking houses in SG or is it what how they call it ? Shrugs* .. Should have notice it earlier man .. Post this to remind myself in case the same thing crops up again.