Mid-year bourse review

Good day all,

Time seems to fly pretty fast for me. Somehow, the “trading department” in my mind still has a calendar showing the first quarter of the year. I started the year with many trading ideas and patiently waited for set-ups to trade. Some came while others were like a passing drizzle before getting out of the house: just when you have umbrella in hand and are reaching the end of a sheltered walkway, the drizzle stops and you are stuck with an umbrella for the rest of the day. Overall, the second quarter of the calendar year proved to be an uneventful one for me. Trending stocks took off before I found them, entry orders were teased but not touched, and – fortunately – stops-losses were not getting activated. So – so; mas – o -menos.

Was the market flat since the start of the year? No. The STI put in a good 10+% showing, and quite a few sectors performed decently. The second- and third- line counters also moved. Western indices were more or less higher. I have a chart of the STI below. 2013 carried forward a bearish market into 2014, and the outlook then did not look promising at all. A classic inverted head and shoulders – which I sighted late and ignored – propelled the market above the 200-day MA and close to the 3300 region. As in my last post on the STI, not that many constituents of the STI portrayed the same picture, but there were those that sprung to higher heights.

I was wrong about the STI at the start of the year, but I have the same conviction again: I am not convinced by the rally so far. More so now that the STI is clearly rounding off and volume was tapering off over the last few months. At the top my head, I already have a rough opinion on which stocks that will drag the bourse lower, and those that carried the STI higher the last few months do not look that bullish. The only disagreeable factor in my analysis is the bullishness of western indices so far. The uptrends are still strong and I do not even see hairline cracks (in general).

sti

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

 

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