Category Archives: Singapore market

Battered, concussed, and now, done for?

Hello traders/investors,

It has been a very long time since my last post. Nevertheless, it should not come as a surprise if you have read my last post titled “The conclusion of the matter“. In the space of time between this post and my last, the markets dived sharply – and probably the nastiest one in a very long time. I remember getting ready for a trade on the VIX two weeks before the strong decline; however, as my luck would have it, I did not enter trading parameters because I was too busy attending to life’s other cares, and so, what happens when you miss the biggest trade of your life? You make your computer do what the markets did, and I ended up having to buy a new one in the Comex show.

Anyway, the consensus immediately after the drop had been that it was the perfect time to buy the huge dip and wait for the recovery; after all, Looking at how the markets had sailed along prior to the sharp drop, it seemed like the stock market was just holding the best sale in many years (while stocks last!). As the days and weeks lingered, the other side of the coin emerged: it could be the first warning – the first rung down – before a truly huge economic catastrophe? Sentiment started to balance between the two sides. I was first very bearish – maybe this was because I wanted another bite – or rather, revenge for missing the boat – at the VIX; however, I have since changed my view and am now looking for entries to catch short-term upside.

Most charts of major global indices are painting a largely bearish, rounding, stalling kind of pattern. There is no well-defined formation but a form of the large head-and-shoulders pattern seem to be emerging – not fully formed but a work-in-progress. This is a serious cause of concern for long-term bulls. Most major declines have a large, loose form of a head-and-shoulders that precede the precipitation of markets. Look at the charts below for examples of what I mean by a gathering storm on the charts.

a1 a2 a3

Note that this picture that I am painting is unconfirmed, unfinished, and large in time frame.  Having missed most of the upside in the last several years – especially on american indices – I am poised to take advantage of downside set-ups. One thing we should all remember is that in general, markets take the stairs up, and ride the elevator down. Generally, comparing in a same timespan, downsides are sharper, quicker, and bigger than upsides. Therefore, even though my trading philosophy leans on longer-term plays, I still acknowledge the rewards of the principle of fast downside in times of panic.

In the short-term, I actually see a higher probability of some upside especially in american indices – less so for european and asian stocks in general. Earnings season in the US has not started well, and probably will not end well as a whole too but remember that stock markets are forward-indicators of the economy, so do not let the release of such results sway any immediate set-ups.

 

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.

 

 

Flavours for 2015

Evening traders/investors,

Apologies for the inactivity during the last few months. It seems to me that I trade less, and have less to say as a blogger too – probably all due to the more patient and relaxed trend-following approach I have been making a transition to over the last year or so. Belated Christmas and New Year greetings to all of you. As market participants, it is best to wish one another a better year ahead! Every year the word “volatile” is used to sum up the markets but it is inevitable that markets will fluctuate and throw up some surprises somewhere inside a whole calendar year. 2014, however, was not so exciting as compared to other years. The local bourse certainly did not give me that many trend opportunities; so much so that I had to look at some other equity markets for the first time. The USD’s languid state in the first two-thirds of the year did not present any concrete trend set-ups too. There were a few set-ups in certain markets, and those set-ups are still valid over the turn of the year.

The first flavour I have for the new year is the possible divergence between Europe and US. I first discussed this view in this post https://technicalanalysistalk.wordpress.com/2014/11/05/end-of-europes-uptrend-while-america-advances/ . It seemed difficult to envision an inversely proportional divergence between those two markets; so I concluded that it probably means general sideways movement in Europe while American equities continued the charge north. For now, the picture is the same to me: nothing has changed in the broad sense for those two markets.

The local bourse- the STI, still does not look that bullish to me even with a decent 6% showing last year. I think this is because I do not see that many bullish set-ups in the constituent counters. The banks did well for the STI last year, and they look set to hold the gains this year, though this will require analysis in the months ahead. SIA also surged suddenly late last year so I will see what is up with the national carrier. The “Jardines” jumped a little in the second half of last year but do not look to improve much from here on. The “agris” are tanking quite badly, and as a trend-follower, I will look for further downside. (Exclude Olam from this list; Olam is an example of what happens when some people interfere. Of course, I do not know what goes on behind their curtains and that of other places, but the way I see it, Olam was saved from utter embarrassment “unnaturally”.)

Funnily, most if not all of the counters in the STI with the word Singapore in the company name have bearish-looking charts. The general stance I am taking on the local equity market is a bearish one for the blue-chips. However, I think there may be better rish-reward opportunities outside the STI, therefore, I will look at the second- and third-tiers more closely. Judging from the last few months of last year, I do not have many interesting charts to share, hence what I mentioned in the first paragraph, “The local bourse certainly did not give me that many trend opportunities; so much so that I had to look at some other equity markets…”. Oil and gas and shipping sectors are looking quite horrible, and property counters do not look promising too (I would have said outright bearish if not for the performance of one or two big players).

I will continue to watch Gold quite closely. The glittery metal seems to be on the verge of a continuation of a major downtrend. Somewhere last year, I was alerted to a break of major support. Gold managed to hold on after the slight violation of support but time will tell if gold can find favour or if investors will ditch gold for other asset classes.

gold1

 

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.

Blue-chips in trouble

Evening all,

I have some words on the local market for today. After a fall starting in September, the STI has regained lost ground, and closed at 3350 on Friday. Two periods of rejection at this region in recent history mean that the STI is testing resistance now. When I look specifically at charts of the component stocks, I see more bearish-looking charts than bullish ones; and this was what I thought a few months back too – which makes me wonder how the STI managed to follow international indices higher. I want to share a few counters that have confirmed their mid-term sluggishness.

This is SIA Engineering – S59.SI. In my last post on this counter https://technicalanalysistalk.wordpress.com/2014/04/10/sia-engg-cruising-at-all-time-high/ – I mentioned my disappointment at SIA Engg failing at an all-time high, and prompted the chance of a downtrend emerging from a consolidation. SIA Engg traded in quite a volatile fashion from August to November before a decisive break down from the range (in black) in the middle of November. The sell-off put SIA Engg 10% below levels seen a few months back. Significantly, SIA Engg is now in a clear downtrend.

sia engg

Next, SembCorp Marine – S51.SI. In my last post on SembMar https://technicalanalysistalk.wordpress.com/2014/02/18/sembmarine-looking-bearish/ – I identified a huge descending triangle. True to theory, SembMar continued downwards. Based on the height of the pattern, SembMar is reaching its target. Incidentally, the downward target from the triangle is where a major low is: $3.10 region.

sem

Finally, ST Engg – S63.SI.

After coming out of a triangle in November of last year, ST Engg went range-bound for almost a year. In August of this year, ST Engg started sliding even lower. A sudden spike sent ST Engg to the 200-day MA but rejection kept the general downtrend intact. The recent sell-off is with heavy volume. The picture looks quite similar to SembMar’s. I see downtrends confirmed in these and other counters.

st

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.

When a trend stalls

Evening all,

Pardon my inactivity for the whole year. I feel that my writing frequency has gone down like how my trading frequency has. In part, the local market threw me quite a number of surprises – but that is what money management and rational decision-making are for. US indices have recovered very strongly from the slight scare a few months ago, and other global indices have taken cue. Locally, the STI has drifted slightly higher, and continued strength will mean quite a good showing for the STI. My watchlist, however, shows a very mixed bag of performances by counters of different levels of market capitalization. Quite a while back, I got into Osim – O23.SI – when it was below $2.00; I posted a few articles during that time. As time passed, Osim kept climbing while financial reports posted positive numbers. Market sentiment was more or less like the chart – not much opposition and mainly praise. When “all sides” seem to agree with one another, it culminates in an easy trade to hold on to. I never had a reason to sell – so I did not.

os

In the chart below, I set the data range from the start of 2013 to the present day. The last two years of Osim’s stock performance are probably satisfactory to a trend-follower: steady up trend, small and mild correction, and a second leg of gains. Straightforward story, straightforward trade.

Only, Osim has started to tank: after hitting an all-time high of $2.94 in March, 2014, Osim has been trading sideways, and the latest trading session brought the 200-day MA into focus.

os2

Strong resistance above $2.84 is born out of the failure to hold that level on numerous times – as highlighted in red. Taking a slightly macro view of the chart, I see two regions that look like the peaks of a simple double top formation. An interesting thing to note is that the 200-day MA is near the neckline of the potential double top formation (which is bearish, generally-speaking) (see if you can spot another one in the middle of 2013), which only serves as confirmation of further downside if Osim does not start finding support. A bearsh indication on the chart is an ugly gap (circled in aqua). The gap came with tremendous volume, and the selling does not seem to have stopped. The picture this year looks worrisome. Some upward movement may be expected since Osim is near a good support zone. After tanking for quite a while, I will consider Osim as flat, so I expect a small rebound. A few more weeks will give a better picture if the market thinks Osim is now trading at a fair range or if Osim should be priced significantly lower. Are the good financial results taking a turn soon? Some more time will give me a better idea. As for now, it does seem like I have sat on Osim for long enough.

os3

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.

Frencken in a similar situation to Kencana

Evening all,

The local bourse has been creeping up over the last few weeks; volume is decidedly low, and it does not seem like any group of stocks is making headlines.

Today, I have two charts I want to place side-by-side – that of Frencken and of Kencana. Kencana Agri, F9M.SI, started climbing out of a consolidation in the second half of 2010, and was progressively making higher highs from August through December. At the same time, volume was in a downtrend. The spikes in volume on strong up-days were getting lower, and the general volume was declining. When 2011 came, Kencana reversed, and has never looked back since.

Moving the attention to Frencken, E28.SI, I have an up-to-date chart below. Frencken has been in a very strong uptrend for quite some time: a 45% showing in 2013, and 42% thus far for this year. Since the start of this year, Frencken has been making higher highs in stock price but lower highs in volume of shares traded. I think the picture looks the same as in Kencana. Frencken is, and Kencana was, riding nicely above the 50- and 200-day MAs.

f9m frencken

On any other day, I will be bullish on Frencken because of the nice trend in place. However, with such a “suspicious” formation that looks so much alike to another in the past – and from another chart – I have to be cautious. Let us see how this goes.

 

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.

 

 

Longcheer

Evening all,

With a name like that, I was tempted to use a title like “reason to cheer?” Anyways, this is Longcheer, L28.SI, a China-based company that deals with mobile phones.

Longcheer experienced quite a drastic decline in share price at the start of 2011. Whatever the reasons may were, Loncheer languished at the $0.10 region for quite a while. However, fortunes turned and Longcheer gathered steam throughout 2013 and into this year. The rally was somewhat steady and progressive, which meant that the 200-day MA could almost keep pace with price. Recently, Longcheer made highs at around $0.34 before retracing down to below $0.28. A quick recovery put Longcheer up at $0.30. I like the resilience of this long uptrend that Longcheer is in. Nothing indicates to me why Longcheer’s trend should stop, so I expect to look for set-ups towards the upside.

long

For those who believe in Fibonacci, I took the highs in 2010 and the lows in 2011 – high and low of post-2008 crash – and found an interesting picture. At the 23.6% and 38.2% retracement levels, Longcheer found resistance. The recent breather is expected because of the 38.2% level – but nothing more than that. I think now is a good time to take advantage of the dip for a long set-up to ride the trend if it continues upwards. Let us see how this goes.

long2

 

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.

 

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.

 

OCBC’s triangle

Good day all,

This is OCBC, O39.SI. Coming out of the crash five to six years ago, OCBC has been on a general uptrend. Towards the middle of last year, OCBC even beat the previous major high and rallied to the $11.00 region – setting an all-time high record too. However, OCBC turned down, and is a good 13% below that high.

Dropping from the all-time high, OCBC traded in a wide range before a nasty descent at the end of last year. The strong slide continued this year before OCBC started swinging again. I draw arrows in the chart below to show that the there are two similar formations on the chart. Will the same result – further slide – happen again?

I am leaning on the bearish side mainly because of the clear downtrend that OCBC is in (though, OCBC’s very long-term trend is up); also, note that OCBC is comfortably below the 200-day MA. A reader of this site highlighted to be a possible ascending triangle in the making (grey lines). This triangle and the formation I mentioned make this an interesting case to follow in the weeks and months ahead.

ocbc

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.

 

 

 

No end in sight

Evening all,

I have a few charts of stocks on upward trajectories for today: Riverstone, AP4.SI; Raffles Medical, R01.SI; Q&M Dental, QC7, and Boustead, F9D.SI. For longer-term plays, I will wait for better prices instead of chasing the strong short-term uptick, especially Q&M Dental.

Riverstone  r01 q  bou

 

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.

 

Hits and misses

Evening one and all,

I have been inactive here for the last few weeks because of a lack of time to put up posts, and I also wanted to give the market some time before I aired my opinions yet again. Since the start of the year, I have been singing the bearish tune for the local bourse. For a while, I was right and satisfied; then, the reversal came. Property stocks swung upwards quickly, the “Jardines” flew – helmed by Jardine C&C, and even the “Agris” rallied. In turn, the Straits Times Index rallied from the year’s low at the end of January – 2960s – to where it is now in the 3200s. In the chart below, I draw 3 brown boxes representing a classic 3-point inverted head and shoulders pattern – this should have been easy to spot.

sti

 

What this all means is that the local equity market has been surprising me. Making up for not keeping up with global indices? Whatever it may be, I am still not convinced with the rally. But that is for another day; when more candles fill up the chart, and with hindsight the picture gains much more clarity.

 

Hits and misses. In the charts below, I show you some counters that I have been proven wrong so far. I did not trade most of them – in case you wonder.

p1 p2 p3 p4 p5 p6

Rally after rally. Olam and Tamasek. Singland and UIC. For  a bear like me, I am starting to feel the heat. Nonetheless, I am still comfortable with what I see on the chart – and that is the most important thing. Now, for some charts to remind me why trend-following is the way.

Remember Osim?

osim

Two stocks that have been on my radar for a long while now: Old Chang Kee and Eu Yan Sang.

Osim, Old Chang Kee, and Eu Yan Sang. Once small companies that are proving to be growing fast and strong – at least, stock chart-wise.

eu 5ml

 

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.