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Technical analysis of SingTel.

Saturday, December 23, 2017

A reader saw my technical analysis (TA) for ComfortDelgro and asked if I did the same for SingTel?

Translated:

"Please share your TA for SingTel."






OK, I don't do TA on request anymore but since I am in the process of building a larger stake in SingTel, here is a quick TA on SingTel:




Since going XD, SingTel saw its share price plunging but I don't think this has anything to do with its business fundamentals which do not seem to have deteriorated enough to warrant the huge decline in price.





If the fundamentals at $3.79 a share are the same as the fundamentals at $3.58 a share, logically, what should someone who was buying at $3.79 do now?

Having said that, price movement is sentiment driven most of the time and this is what we call "volatility".


There is no accounting for prices and Mr. Market does not care what we think.





For those who bought at a much higher price only to "cut losses" now, I only hope they do not regret later on.

If I were in their shoes, I would ask if I did not buy at those higher prices, would I be buying now?

This question will probably yield a more rational answer.

Well, it has always worked for me.





To be fair and also to be rational, what they do depends on their motivation for buying into SingTel when they did.

Always remember that TA is about probability and not certainty.

It is quite clear to me that there is support at $3.58 a share but it is not a strong support per se.

The Fibo golden ratios are at $3.53, $3.49 and $3.45.

These supports might or might not be tested but if the downtrend should persist, these are the prices which could see me accumulating.






In terms of momentum oscillators, both MFI and CMF are pretty benign which suggests to me that the bears might lack the strength to push the price much lower although the huge gap down in price is bearish and that is what the MACD reflects.

Although I believe that investing in SingTel at $3.58 provides value for money and that money isn't flowing rapidly out of the stock, it might not be a good idea to throw in everything including the kitchen sink at this point either.

I anyhow talk to myself only. I blur.

Related post:
Technical analysis of ComfortDelgro.

15 comments:

Kevin said...

Hi AK,

Current MACD is below signal line and RSI below 50. Current closing price $3.59 is also below 20 50 100 DMA.
Low can get lower, high can get higher. the trader/investor needs to analyse the following actions, buy hold sell short wait and not focus only on a single action to anticipate price movements.

I hope your readers know how not to go in or follow blindly as it is important to enter as a investor and exit as an investor as well as enter as a trader exit as a trader and not for example enter as a trader and become a long-term investor due to market conditions. However, it is possible to go in as a investor but exit as a trader. ;P

AK71 said...

Hi Kevin,

Everybody should have a plan, their own plan.

It is never a good idea to ride on someone's coat-tail.

AK71 said...

Mark Lim Teng Lye:
I went into the minute buying and suspect price are dropping us because traders are pushing it down to triggers people stop-loss which tend to set just below the 52 week low. Once triggered, many sold down and then the price rebounced yesterday. Just my observation.

Potatoish said...

Hi AK,

Thanks for the excellent post. I wasn't expecting this but it helps affirm my own analysis and also enable me to learn from others(you and other comments from other readers_

This is my not so professional analyse for Singtel:

1) Prices always bounced off the good support at 3.6X levels during the 52 weeks period
2) Last time it crashed to the low of 3.4X ( early 2016) the market is still weak recovering china's aug 2015 crash. Hence, when comparing now(huge amount of cash in hand) and then, Singtel is in a much better position today(ignoring the competitive teleco landscape)

Hence, before XD I initiated a position below 3.70 and after XD, i added some more at 3.64. I thought wow below 3.65(52 week low, not bad. but was too hastily in my decision. it drop more the next day and true enough my there was an Increased amount of shorts on Singtel after the XD(Perhaps XD+ short sell adds drama to the "bigger sudden drop in pricing")

Anyway, like you i pull out my charts and figure the next good support was 3.58( added some that position) but more cautious. I don't think it break the super strong support of 3.46( never say never) but who knows when it does i hope I have enough money to add more as currently SIngtel is my largest holding counter after reits :P

With the increase of interest rates, i felt it is the right move to move my funds into blue chips( i am quite reits heavy too) and reduce some exposure in risker reits( eg: industrial reits) knowing the landscape is going to be tough in the coming years. That is my plan hopefully it works out for me.

Merry Christmas AK!

Cheers!!!

AK71 said...

Hi JQ,

I am still holding on to my investments in industrial S-REITs. With new industrial space supply tapering off, the oversupply situation should stop worsening but it would take some time to digest. I just have to be careful that I don't have a Sabana REIT in my portfolio. Oops, actually, I do have Sabana REIT. ;p

As for SingTel, I wasn't expecting the blog either. It just kind of happened. ;p

I am not a professional chartist either. So, take it with a pinch of salt or two hor. -.-"

I believe that you are more of a FA guy who is trying to use a bit of TA which is what I am doing mostly. I always tell myself that, keeping in mind my motivation, as long as I am approximately right, I will do well enough over time and so far, this line of thought has been right more than wrong. :)

Merry Christmas!

Potatoish said...

Hi AK,

Hohoho merry X'mas. I donn't have Sabana in my portfolio but if needed to reduce a bit on Aims Amp (previously was my biggest holdings). FA/TA depending on which make sense to me and depending if i am trading or investing.

I like to think of myself as a TA guy. However, the sad truth are my investment/mid-term trades has been positive but same cannot be said for my short term trades, contra, etc. Those have been horrendous! Imagine losing more than your annual passive income :P hence why I have been much focus on generating passive income with the help of TA.

I like how your blog has a balance of both TA, FA, CPF and side stories of weekly life. I am trying to find your post on reducing Income tax( yes its the time of the year again)

Happy Holidays!
JQ

AK71 said...

Hi JQ,

Well, I believe that a holistic approach to financial freedom is the most sensible and, so, that is what I share in my blog:

Holistic approach to secure financial future.

Of course, my philosophy in wealth building might be boring and it probably isn't suitable for everybody.

Now, how to reduce income tax?

I think this blog might help:
Ways to reduce income tax.

AK71 said...

Reader says...
Main purpose of texting you is to ask if starhub is a gd stock to buy now, last traded at 2.55

AK says...
I have Starhub but it is a much smaller investment compared to SingTel. 😉
I would keep any investment in Starhub relatively small.

AK71 said...

Reader says...
Hi AK, thank you for the reply. I appreciate it when you're so busy. I invested in Singtel at a much higher price of 3.86. Singtel is facing a lot of headwinds from decreasing revenues and the 4th telco coming into Singapore. Business prospects don't look at good. Why are you still so confident?

AK says...
Singtel is transforming. It is stronger and more resilient today. SingTel is not M1 nor Starhub.
Also, if you take a look at where the headwind is strongest, it is in Singapore and in the consumer business. This is a small portion of their business.
The overall picture is not all bad.

AK71 said...

Jon Zhuo said...
my target for singtel is 2.90. how do i get my number? same question how do you know 319 a few days ago is good. now is 311. every few days, it hit 5 yr low.. where is the science! to determine what is fair now..? if there is no target then we risk ending up not buying anything. so 290..for now


AK said...
I don't remember saying $3.19 was good but I do remember saying $3.11 was a support.

http://singaporeanstocksinvestor.blogspot.com/2017/12/technical-analysis-of-singtel.html

For sure, whether the support would break or not no one knows.

I do know for sure that as SingTel's share price goes lower, it becomes better and better value for money.

So, what to do? ;p

Kevin said...

Hi AK and Jon Zhuo,

why not buy when there is a trend reversal from down to up instead of catching falling knives? Of course one has to pay a higher price for the conformation. -_-"

By the way, one also has to integrate with the happenings of the world's economy before making any decisions as you might know Singapore's weightage in the MSCI World Index is not even 1%. Singapore cannot influence the world but anything outside Singapore will definitely affect Singapore. Singapore is just like a penny stock to the world's economy. ;)

AK71 said...

Hi Kevin,

I will talk to myself about SingTel when I share my 2Q 2018 passive income from non-REITs. ;)

Jon Zhuo said...

Hi Kevin

on 2nd thought i agree with you. i asked a friend recently what his target will be. he say he has one. its called 'moving target' and his explanation is in line with yours. dont catch a falling knife, even if its five year low everyday. The trend line has been only down so far in the last few mths. perhaps wait until we see some kind of a confirm consolidation plus a reversal and breakout from the current trend. its ok not to catch the last cent at bottom but ride the rebound when it comes.( easier said then done but some knowledge of TA will help plus sharing of views with fellow investors to test our views, like on this blog can help!)

Hi Ak, looking fwd to your sharing. Always enjoy your poetic wisdom and humor!

Unknown said...

Looking forward to your self-talk on Singtel. :D

AK71 said...

Akan datang.

I will try to publish the blog tomorrow. :)

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