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Monday, January 30, 2012

Yoma - Bull Flag Breakout

Yoma breakout from a textbook fashion's bull flag formation today. I was late in identifying this opportunity but if it is going to give me a 2nd chance tomorrow with some retracement to say $0.315, I will consider picking up some as the target is $0.45. Judging at the flag pole being a straight line, I suspect it will not be giving me that chance.


Saturday, January 28, 2012

Weekly Technical Update - The STI

The Straits Times Index ( 2,916.26 )

The STI closed above the key resistance at 2,910 by 6 points. Should we consider this a successful violation of the key resistance? My take is not (yet) ! Real life application of Technical Analysis differs from academic model. Support and resistance isn't going to be textbook fashion all the time. When we said a key resistance is 2,910, the resistance is likely to fall within a band of +/- 5 points to 10 points. The rationale is that market participants aren't going to enter or exit their positions at the exact same spot. Therefore, when we talk about successful violation. We should apply some filters to qualify the violation. Some common filters are the "1% ~ 3% rule" and the "2 day rule". In other word, unless the STI closed above 2,910 by at least 29 points ( 1% ) and/or for at least 2 days, it is not considered a successful violation yet.

Given the facts that the STI is still sitting on the key resistance as explained above, RSI has reached overbought, volume has declined the past three days while prices edged higher and DJIA felt by 74 points over the weekend... The odd favors a weakening start for the upcoming week. There is, however, a wild card :  All of the 21 points gain on Friday was rack-up on the last trading hour. Normally, late Friday rally would mean renewed buying interest on Monday morning.

To sum up, STI may have breached 2,910 by a tinny margin but the violation was not decisive enough to have considered a breakout. It may be worthwhile to stay at the sidelines to see if STI will overcome ( breakout ) or succumb ( triple-top reversal ) to 2,910 in a decisive fashion. 


Saturday, January 21, 2012

Weekly Technical Update - The STI

Straits Times Index
When the market resumes trading after the Chinese New Year holidays on Wednesday, we are likely to see the STI retesting the key resistance at 2,910. This is a key level because it is the resistance of the last significant highs, Fibo 50% of a major peak and trough, and the 200MA. It is not a level that can be defeated too easily considering that the index has already rack-up considerable gain without a decent pull back since January 3 where the market is quite overbought. Failure to overcome 2,910 calls for a pull back to 2,790 and 2,730. On the contrary, successful breakout from 2,910 will likely see the index propel to 3,000 ~ 3,200.

-- Stocks Review and Commentary --

UMS Holding Limited
UMS has successfully breakout from the Fibo 50% confluence by 200MA. Next resistance is $0.48 ~ $0.50 which is where Fibo 61.8% is. Once $0.50 is taken, Parabolic SAR buy phase in the monthly chart will be triggered. More upside can be expected.

Note : Granted that RSI is overbought but overbought during a strong uptrend is not a reason to liquidate a long position ( unless a failure swing is developed ).  

Genting has successfully breakout from a downtrend resistance line but resisted by Fibo 23.6%. If the breakout can be sustained, next target will be $1.75 which is Fibo 38.2% confluence by 200 MA.

IndoFood Agri
Watch for breakout at $1.45 and $ 1.50 ( 200 MA ) for more upside.

Olam International
Latest prices met resistance of a downtrend line and 200 MA where RSI is reaching overbought. Failure to overcome this level ( and the next downtrend resistance of a larger time frame ) calls for a pull back to $2.30.

Prices met resistance at Fibo 23.6% while RSI has reached overbought. Some short term retracement is possible. Thereafter, the next target will be $1.21 ( last significant high confluence by 200 MA ).

Capitaland has met the downtrend resistance line. If it is able to breakout from the downtrend line, the next two targets will be $2.75 and $3.1. Failure to overcome the downtrend line will likely see a pull back to form a new low.

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Thursday, January 19, 2012

UMS Holding Limited

This is a counter where position trader ( 3 ~ 6 months ) may want to watch.
On the daily chart, prices have now met the resistance of 200 MA and Fibo 50%. Prices need to break $0.45 to propel further to $0.50.  $0.50 is where Fibo 61.8% is. Once cleared,  Parabolic SAR buy phase on the monthly chart will be triggered. More sustained upside can be expected when that happen.

As far as the index is concerned, the STI has turned to bullish zone yesterday in the mechanical chart. Key resistance 2,910.

iOCBC published a nice technical analysis on STI. I share the same technical view as them.    ( click  iOCBC )


Sunday, January 15, 2012

Weekly Technical Update - STI

Straits Times Index

The STI has rallied to the resistance at 2,790 while the Stochastic is overbought. At the backdrop of S&P downgraded the credit ratings of 9 European countries and DJIA fell by 48.96 points on Friday.  We expect a likely pause here, but renewed rally should ultimately return to test the 2910 in the coming weeks.


Wednesday, January 11, 2012

STI - Buy Signal From K39 The Last Stochastic

The STI breakout from the downtrend resistance line earlier this week.  A buy signal was generated on the "K39 - the last Stochastic technique" Immediate resistance 2,790.  Notwithstanding the buy signal and the rally, the larger trend of STI remain bearish unless it is able to break the resistance at 2,910 which is where the 200MA is. 

NOL finally breakout from the congestion zone with high volume.  


Thursday, January 5, 2012

Market Updates

The STI closed with an inverted hammer today while Stochastic is overbought. This may signal the end of the New Year rally.  

NOL did attempt to breakout on Wednesday but it was not able to hold on to the initial gain. In other word, it was a false breakout or a bull trap. However, the counter is currently in the bullish phase of my mechanical chart ( see below ). So it is too early to rule out that the buy signal was wrong.

SembCorp has weakened as expected upon touching the downtrend line. The short call was valid.

Biosensor has been trending up very strongly but today closed with a long tail and RSI bearish divergence. Some pull back is expected, a good entry will be $1.2 ~ $1.4 ( to be assessed as market unfold, see note below ).

Note : Do note that the market is very dynamic whereas the posts made here are static. It is impossible to attain 100% accuracy as I am not a fortune teller. Anyone reading this blog is expected to pay attention to the market action the next day(s) and decide what to filter....

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Tuesday, January 3, 2012

Weekly Technical Update - The STI

The STI rose 42.01 points or 1.59% to 2,688.36 on the first trading day of 2012. This is in accordance with our view on December 29 where we stated the market is likely to stage a mini rally until January 5~6.

The rally today occurred within the downtrend channel. The bulls need a sustained violation of the downtrend resistance line for further rally to the next resistance at 2,795. Failure to surpass the downtrend resistance line calls for a pull back to 2,520.

Depending on how the market pan out. Breakout from the downtrend resistance is a sign of strength, candidate to long is NOL. Reversal from the downtrend resistance is a sign of weakness, candidate to short is SembCorp.

NOL - Long only if market shows sign of strength:

SembCorp - Short only if market shows sign of weakness:

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