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.

 

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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

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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

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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

 

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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

 

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SIA Engg cruising at all-time high – for now

Evening all,

I have SIA Engg, S59.SI for today. Ever since besting all-time highs two years ago, SIA Engg entered into a distribution phase and traded in a fairly wide range between $4.60 and the $5.00 region. A clear support zone formed just above the previous major post-crash peak. In my last post on SIA Engg, https://technicalanalysistalk.wordpress.com/2013/05/02/singapore-market-moving-up-sia-engg-impresses/, I trusted the strong uptrend at that time. But as time unfolded, SIA Engg sold off quite severely – 10% off the peak. Fortunately, I was not in a position.

SIAE

Now, I shall zoom in on the rangebound market – since this is the current state of the market for S59.SI’s shares. I highlight a number of events inside this flat phase. First, you can see the failed attempt at holding the all-time high surge; then, there is a large symmetrical triangle – although not the best-looking, a clear enough zig-zag price action coupled with ideal volume behaviour confirms the pattern; finally, a bear flag portraying the breakout towards the downside of the symmetrical triangle. What seems like a boring flat market is putting SIA Engg on the radar.

One thing to note is that the flag pole of the bear flag is not exactly ideal: there is a gap in it. Also, the flag of the flag pole seems more like the market filling up the gap casually. As a longer-term player nowadays, I will still take the flat market as it is. But in a few months’ time, if SIA Engg is clearly broken down from this range, I just might look at it seriously for a bearish set-up.

siae2

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Sudden pick-up in local bourse

Evening all,

While international markets were looking for clear direction, the STI picked up some points. The STI is above the 200-day MA for the first time in around six months; an easy to spot downward parallel channel is violated on the upside too. A check on the components of the STI reveals “the Jardines” and a few others were drivers of the recent uptick. Outside of the blue chip category, the property counters are enjoying a good run. Quite a few stocks that I blacklisted into my bearish list have been showing signs of life in the last two weeks or so of trading. Naturally, I am disturbed, and am worried for those that I have a position in; but, these are only short-term swings, and only time will tell if they grow into clear mid-term trends.

In the chart below, I highlight a small head and shoulders pattern that formed somewhere near the top of the parallel channel. At that time, it seemed like the head and shoulders appeared at an opportune time: resistance from the upper limit of a channel (I do not use  channels for trading but I still lay them on a chart for illustration), and rounding off just below the 200-day MA – ready to send the market below 3,000, perhaps. Far from that result, the STI flew up.

While I am still comfortably a bear, I shall see how the recent strong showing pans out.

schart

 

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Jaya Holdings – is it now?

Evening all,

Short post tonight on an update of Jaya Holdings. ( https://technicalanalysistalk.wordpress.com/2014/01/29/jaya-sailing-high/ .)

Ever since my last post on Jaya, a symmetrical triangle formed. This triangle is quite good-looking seeing how the lower highs and higher lows can be easily identified. When Jaya breaks out, it shall be as in the classical novel, Moby Dick, “there she blows!”

Jaya

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DBS tipping over

Evening all,

I have been watching DBS quite closely since the start of the year. I usually have nothing much to comment on the local banking counters because their charts always seem so uninteresting; however, DBS started showing some signs that prompted a move to my watchlist.

DBS has been in a steady uptrend for quite a while already. In 2013, DBS pushed for highs at the $17.50 region, and went down after every attempt to best the year’s high. This is a sign of a trending stock that is starting to tank: the market not seeing any reason to price the company higher. In making higher lows, though, DBS formed what can be seen as a symmetrical triangle. Price bounced off an uptrending 200-day MA too. Late in 2013, DBS flew up and broke the resistance trend line of the then unconfirmed triangle; this meant a breakout towards the upside. Several flat trading sessions followed before DBS dropped like a stone: the bottom triangle trend line broke quickly (busting the symmetrical triangle), the 200-day MA was pierced, and even a bearish pattern – a bear flag – was formed and was confirmed.

Before last weekend, DBS looked set to fall; now, it has already accelerated downwards with a gapped candle for today’s trading. One very interesting pattern that surprised me initially is a lopsided head and shoulders. The recent slide confirms this pattern too. All these signs are telling me to look for further downside in DBS. As a pattern trader, this chart presents quite a few different set-ups for trading. As a longer-term player, I will be waiting for a retracement upwards if all these bearish, confirmed patterns turn out to be successful. Let us see how this goes.

dbs1

dbs2

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.