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Charts in brief: 7 Jun 10.

Monday, June 7, 2010

FSL Trust: Formed a white hammer, closing at 45c after gapping down to start the day at 44.5c.  Closing at 45c is below the trendline support in the short term. Could we be seeing the start of a bottoming process with 42.5c as the base and 46c as the neckline? Could we be seeing the start of a trading range with support at 42.5c and resistance at 46c?  Although the MACD is above the signal line, it remains in negative territory. The MFI has peeked above 50% and the OBV is flattish.  Selling pressure has abated.  That much is obvious.






AIMS AMP Capital Industrial REIT: We have a sell signal on the MACD histogram. The MACD seems to be flattening as the signal line continues rising to catch up.  OBV is rounding from a peak although MFI is above 50% and rising gently.  Still, I would like to sell some at 23c, the top of the trading range but I might not get my wish.  Immediate support is at 21.5c.




SPH: The white spinning top formed last Friday was confirmed today as a reversal signal.  Price gapped down from the opening bell and did not once trade above the 200dMA at $3.72. All the technicals suggest that SPH is going to see more weakness in time. Volume expanded today as we have a sell signal on the MACD.  I was waiting to sell more at S$3.83 last week but that price did not happen.





CapitaMalls Asia: Although we have a white candle today, it was on reduced volume. The negative divergence between price and volume is obvious.  Sell signal seen on the MACD.  MFI has been forming lower highs in the short term.  OBV is lacklustre.  I still see a symmetrical triangle and this needs to be resolved.  Otherwise, the situation remains dicey although I believe there is a downward bias.


Plan and hedge.

Sunday, June 6, 2010

Having a plan is important in almost everything we do.  We want to do well in school, we plan. We want to do well at work, we plan.  We want to start a business, we plan.  We want to have a happy marriage, we plan.  We want to do well in the stock market, we plan.  It goes on.

 Embarking on any journey without planning is foolhardy, in my opinion.  We might end up drifting and, maybe, even destitute as we use up all our resources. Some might enjoy this kind of gypsy like existence but I surely don't. However, does it mean that if we plan well, we will always do well? I think we know the answer.

I believe in hedging in a world of uncertainty. There is never anything that is for sure. See how the stock markets rallied almost non-stop for more than 12 months since March 2009? Along the way, at every dip, bears said a correction was going to happen but the markets powered on upwards.

Mr. Market does not care what bulls and bears think. Mr. Market will act how he acts and that's that.

In a world of uncertainty, hedging has to be part of our plans. For example, I believe in accumulating high yields for passive income but if I see the high yields developing a downtrend, what do I do? Sell some as they form lower highs. I could perhaps buy them lower. What if they don't go lower? Well, that's why I would only sell some.

Always remember that FA is about value and TA is about price. Value and price are not the same thing. FA tells us something but TA might tell us something else. We might be holding the stocks of very good businesses but if the prices are in a downtrend, selling some is what I would do. It is the pragmatic thing to do. You have heard this before but I will say it again: Don't be overly bullish or bearish, be pragmatic.

After the bloodletting on Friday in the European and US stock markets, what will happen tomorrow in Asia? Most would guess that the stock markets in Asia would follow suit. I am inclined to think that way too but the truth is I don't know. Maybe, the SSE would throw a positive surprise and send stocks upwards. Who knows? This is the state of the markets now: one of heightened volatility.

In a Tech Ticker interview, Felix Salmon of Reuters had this advice to give: "Rather than suffer through the tough times, Salmon’s simple message for the average investor: Sell your stocks. Now!"


Personally, I think this is somewhat extreme but it might be good advice for people with weak hearts. Just don't bang your head against the wall if things go the other way instead.

Charts in brief: 4 Jun 10.

Friday, June 4, 2010

FSL Trust: Bought some units at 45.5c today.  Volume shrank as price closed at 46c.  46c is still the resistance to watch. A semblance of stability has returned to this counter but its price is probably not going to rise in a hurry. MACD continues to rise above the signal line and MFI is testing 50% once more.





LMIR: Price closed at 47c above the 20dMA on low volume. We need confirmation that the 20dMA is resistance turned support. 47c is a many times tested support and should provide resistance.  I have sold some units at 47c to reduce my exposure. Next resistance level is at 48c which approximates the positions of the 50dMA and the 200dMA. The downtrend is still intact.




AIMS AMP Capital Industrial REIT: 22.5c. Very low volume. MACD has crossed into positive territory and MFI continues to rise above 50%. OBV has flattened at a high. I continue to queue to sell some at 23c, the top of the range.




Golden Agriculture: A doji formed today on very low volume. The downtrend is intact even as the MACD forms a bullish crossover with the signal line in negative territory. A lower high in the MFI tells of weak positive buying momentum. I have sold into strength and will wait for clearer signs of bottoming before going long again.




SPH: Volume continues to fall as price formed a white spinning top today, resisted by the 20dMA at $3.79. OBV is flat. MFI is moving to test 50%. The negative divergence between rising price and falling volume is quite clear to see (as with many other counters). I would like to to sell some SPH shares at $3.83 but without volume, it seems difficult.



Related post:
Charts in brief: 3 Jun 10.

Charts in brief: 3 Jun 10.

Thursday, June 3, 2010





AIMS AMP Capital Industrial REIT: There is no doubt now that this counter has cleared a major resistance provided by a cluster of MAs. Closing at 22.5c today increased the probability of a retest of 23c, a long term resistance.  Would it stay range bound with 23c as the upper end of the range? The MACD is rising strongly and looks set to cross into positive territory which would signal the return of positive momentum. MFI is rising and OBV is rising.  The momentum seems strong.




FSL Trust:  Volume expanded nicely today on a white candle day.  The declining 20dMA is growing gentler in its gradient.  MACD continues to pull away upwards from the signal line in negative territory. MFI formed a higher low as it moves to test 50% again.  OBV is rising. The Bollinger bands are narrowing which suggests a reduction in volatility. 46c remains the resistance to watch for now. The declining 20dMA is at 47c.  Clearing these resistance levels could possibly see a target of 51.5c.




Golden Agriculture: Price touched a high of 52c after overcoming resistance at 50.5c. 52c, incidentally, is also where we find the declining 20dMA.  I have sold my remaining shares in this company at 51c. The negative divergence between rising price and falling volume is quite clear.  The downtrend is still intact and this rebound has provided me with an opportunity to divest.




SPH: Very nice white candle day but the volume has declined. Negative divergence.  Not so nice. MACD is poised for a bullish crossover in negative territory.  MFI has formed a higher low but OBV is flattish.  Closing at $3.79 is where we find the 20dMA.  Breaking this resistance, I believe, will find resistance at $3.83 next as this is where we find the 150% Fibo line as well as the 100dMA. Breaking this level would find resistance higher up at $3.88 and $3.90. Without an expansion in volume as price moves higher, I am doubtful that the higher resistance levels could be taken out and would therefore sell into strength.



Related posts:
FSL Trust: Time to buy?
AIMS AMP Capital Industrial REIT: A strong up day.
SPH: Flirting with the 200dMA.
Golden Agriculture: Downtrend is intact.

Charts in brief: 2 Jun 10.

Wednesday, June 2, 2010

Healthway Medical: Closing at 16c today is probably a relieve for shareholders of this company. 16c is where we find the flat 100dMA.  16c is also a many times tested support and likely to be a strong resistance. So, it remains to be seen if this could be taken out.




Volume has been thin and any upward movement in price is not convincing, therefore. Personally, I would sell into strength, especially if price continues to appreciate. Sell some at 16c and sell more at 17c? Maybe.

LMIR: A low volume day as the MACD crossed above the signal line and price closed at 46.5c, approximating the declining 20dMA. Volume has been declining as the price staged a rebound from a recent low of 42c. I would continue to queue to sell some at resistance as a hedge. I see a band of resistance from 47c to 48c.






Related post:
LMIR: Up against a wall?

Golden Agriculture: Downtrend is intact.

Tuesday, June 1, 2010

I have a very small long position left in Golden Agriculture, having divested half of my remaining investment at 55.5c in mid May as the counter formed a lower high in the current downtrend which started in late April. It has continued to form lower lows and lower highs since.




The immediate resistance seems to be 50.5c now while breaking the low of 24 May would have a downside target of 44.5c as suggested by Fibo lines which coincides with gap support formed on 9 Nov 09.  That is some way to fall.

I am definitely not in a hurry to add to my long position at this point in time.

SPH: Flirting with the 200dMA.

SPH has been flirting with the 200dMA in the last few sessions. Today, it closed firmly below the 200dMA, forming an inverted white hammer, at $3.69.  I am watching this counter very closely as it is my favourite blue chip for its high yield and fortress-like core business and real estate interests. Also, I have divested about half of my investment in this company at $3.95, a lower high, in an earlier session after it hit a high of $4.18 in late April. So, I would like to load up again in order to keep my portfolio balanced.




Seeing how the 200dMA is in danger of being left behind, I plotted Fibo lines which suggest that price could go as low as $3.52 which coincides with the lows formed in the first half of Nov 09.




If we look at the weekly chart, we see that the rising 50wMA has not been compromised as a support.  It is at $3.63 this week. I might buy some at $3.63 as a hedge.

CapitaMalls Asia: Dicey.

For three consecutive sessions, the downtrend resistance line has been tested and broken. Today, it seems that price has closed above this line at $2.11 while being supported by the 20dMA. The bugbear is, of course, the negative divergence between the rising price and the falling volume. If volume does not expand meaningfully as price increases, any further upside might be capped by the declining 50dMA.




Where the momentum oscillators are concerned, the MFI has been forming higher highs and higher lows, suggesting rising buying momentum. The MACD is rising and has stayed above the signal line which is promising although it is still in negative territory. The OBV is not as encouraging and is flattish.  All these technicals combined with the price action forming higher lows and lower highs which create a symmetrical triangle suggest caution to be exercised when going long here.

Any continuing move upwards would be met with resistance in a band from the 50dMA at $2.17 to $2.19.  Without a meaningful expansion in volume, it is unlikely that this resistance band would be overcome. Further downside should find initial support at $2.03, provided by the uptrend support.  Until the symmetrical triangle resolves itself to have price go either up or down, the situation remains dicey.

FSL Trust: Time to buy?

FSL Trust has moved above its most recent downtrend resistance on 27 May and has established an uptrend support since it bottomed at 42.5c on 21 May with a white spinning top.  That white spinning top has delivered as a reversal signal, it would seem.

The MACD has crossed above the the signal line in negative territory.  MFI has formed a higher high after being resisted at 50%.  OBV has stopped declining.  All the technicals suggest that downward pressure has eased and that its price might now be basing.




Should we buy some now? As a hedge, maybe. We have to bear in mind that price has been rising recently on very low volume.  If price starts declining again soon, we would have a lower high formed and we want to see that 42.5c is not tested again (in which case, it would form a higher low) or, if it is tested, it should hold up (in which case, it might form a double bottom).  If 42.5c breaks as support, a new lower low would be formed, which is bearish.  Then, the MACD's bullish crossover in negative territory would have just been signalling a rebound and not a more bullish reversal.

So, I might hedge with a smallish long position but I would only buy more if I see clearer signs that price has bottomed and that it is recovering.

Related posts:
FSL Trust: A sinking ship?
FSL Trust: That sinking feeling.


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