|
Market Correction
STI has corrected by 241 points in a fast and furious manner after breaking the uptrend line on January 21. The support at 2,785 did serve as a brief defense but not for long. Subsequently, even the 100 SMA was taken ! Next major support is 2,600, which will be where the 200 SMA be. However, the market won't move in a straight line whether up or down. RSI is severely oversold now. Chances is the market will head for a rebound before deciding which way it will go!
IndoAgri Update:Prices has reached a major support ( $1.90 ). We need to observe whether the support holds. If it does, $1.90 will be a bargain. If it don't ( support breaks ), we may se $1.20 !!
DJIA / STI January 25 - 29
One week ago, we mentioned Dow was testing an up trendline ( thick black line ). If it bounces up from there, it is a sign of strength. Conversely, a break below will be a sign of weakness and will give in to a flatter trendline ( thick blue line ) as the next possible support.
As it turns out, Dow pierced the thick black trendline decisively and plunged by 4.1% to 10,172 last week. It is now supported by the thick blue trendline confluence by 100 SMA & the thin black horizontal support line. RSI has dived to near oversold. Quite likely, we will see prices reverse from here. But in case this is wrong, we may see 9,700 as next support.
Locally, STI did get very close to the 2,785 identified in our last post ( intra-day low 2,791 ).
Several scenarios for Monday following DJIA 216.9 points plunged on Friday:
1. STI negate the - 216.9 loss of Dow and proceed to have technical rebound
2. STI response to the -216.9 loss of Dow in the morning but rebound soon after
3. STI continues the losses of last Thursday & Friday
Unless 2,785 is taken decisively ( if this happens, next target is 2,730 ), otherwise it could be a good time to enter under scenarios 1 & 2.
Labels: Market Direction
STI - Trendline Broken
STI broke a major up trendline today as shown in the chart. Technically, this is a sign of weakness. Although technical rebound should take place after two days of heavy plunge, the price objective for violating the trendline is set at 2,785 for the upcoming weeks.
Labels: Market Direction
IndoAgri - Critical Chart Point !
IndoAgri has arrived at a critical chart point today. The intra-day low at $2.26 touched the steep up trendline ( gold line ). If it is able to bounce up from here, all is fine! Otherwise ( ie: if the golden color trendline is penetrated decisively ), we can expect $1.90 in the near term.
I have made a quick profit the last two days. A quick entry on Monday at $2.32 & exited on Tuesday at $2.37.
Labels: Stock Pick
Market View - DJIA, STI
DJIA tested the tentative up trendline ( the thick black line ) on Friday and closed above it. If the index continue to bounce up from here, the uptrend is not only intact but the tentative trendline will turn into a confirmed trendline with three touches. Conversely, if the up trendline is broken. We will be looking at the flatter thick blue line as support ( around 10,300 ). Take note that RSI continued to show bearish divergence since August, a caution sign on the potency of the uptrend.
Locally, STI may take cue from the triple digit plunge of DJIA. Key supports are 2,880 & 2,830. As previously stated, the current level where STI is trading is very near to Fibo 61.8% between Oct 07 high and Mar 09 low. The exact Fibo 61.8% is 2,980. This level will present the index with major resistance. But if the index is able to break above, it will signal sign of strength. Once that happen, we can look toward 3,250.
Stock Watch: IndoAgri at $2.16
SGX update: The buy trigger did not take place since our last post. What happen instead was that SGX has completed the return move which is common after a breakout. Buy trigger remains at $8.60
Labels: Market Direction
SGX
SGX broke out from a downtrend channel on January 4. If it is able to break above the last significant high at $8.52 ( preferably $8.6 ), this will trigger the weekly chart to turn bullish. 1st target $8.90, 2nd target $9.50. Stop loss at $8.30. This will be a position trade aimed at mid-term.
Labels: Stock Pick
Cosco
After almost 6 months of bearish bias consolidation, Cosco staged a remarkable rebound since December 28. The stock has rallied by 35% the last ten days. On the daily chart, it is now facing resistance at $1.37. If it is able to clear this level, we may see $1.47 in the horizon. Conversely, if it is unable to overcome this level, we may see prices pull back slightly to correct the overbought situation.
Both weekly chart & monthly chart are bullish based on Parabolic SAR. So regardless of the short term direction, this may be a good time to enter for
long term investment.
Labels: Stock Pick
SIA - Swing Trade Setup
After three days of decline, prices are now trading near 20 SMA and CCI is in oversold. region. While prices may dip further ( better - provided not below $14.10 ) before a rebound takes place, anytime when it bounces back to previous day high or 30 minutes high will be the swing buy trigger.
Another two counters that have swing trade setup are Genting & SembMar.
The Market:STI is currently trading very near to 61.8% Fibonacci retracement level between October 2007 high and March 2009 low. Penny stocks are dominating the top active counters. Both signs combined warn upside maybe limited. Immediate supports are 2,900, 2860 and 2,830.
According to the popular saying, 'as January goes, so goes the year". The first five days in January serves as the barometer of the new trading year. So far, Jan 4 was fine but Jan 5, 6 & 7 are lackluster.
Labels: Market Direction, Stock Pick
Bullish Stocks With Fresh Buy Signals
Below is the MetaStock scan of a list of bullish stocks with fresh buy signal. Buy ONLY when prices traded ABOVE ( at least 1 bid above ) the closing price shown. Should profit taking set in tomorrow where prices tank, entry will probably be delayed to another day....
Labels: Stock Pick
