Charts in brief: 8 Jun 10.

Golden Agriculture: Price tried to move higher today, only to close unchanged, forming a gravestone doji in the process. MFI has formed a higher low.  OBV is flat.  The MACD has risen above the signal line in negative territory.  Selling pressure has abated but it is obvious that the counter has broken its longer term uptrend as it has been trading below the 200dMA for many sessions now, unable to recapture support. The 20dMA is also poised to form a dead cross with the 200dMA. Further downside should find support at 44.5c as shown by Fibo lines.  This happens to be a gap support formed on 9 Nov 09 as well.  Immediate resistance is provided by the 200dMA at 51c and this coincides with the 78.6% Fibo line.

Golden Agri’s price target cut to $0.62 by CIMB
Tuesday, 08 June 2010

© 2010 - The Edge Singapore

Healthway Medical:  News that Peter Lim became a substantial shareholder of Healthway Medical has given the share price a lift. Volume expanded today as price touched a high of 17.5c before closing at 17c. MFI is now testing 50% while OBV has risen. MACD continues to rise above the signal line in positive territory. There is no doubt that this counter is seeing a trend reversal. Continuing rise in price would find resistance at 18.5c.  Breaking 18.5c would suggest that we have seen a double bottom formation and would establish 13.5c as a very important support in future.  If 18.5c fails to be taken out, we might see a triple top formation.  In the meantime, congratulations to all who are still vested and do keep an eye out for any negative divergences.

STI slips 0.2% to 2,746.61 at closing
Tuesday, 08 June 2010

© 2010 - The Edge Singapore

AIMS AMP Capital Industrial REIT: A gravestone doji formed today as price closed at 21.5c. MACD has completed its turn downwards towards zero. OBV continues to decline suggesting distribution is taking place although a rising MFI suggests that positive buying momentum is still present.  I would accumulate on weakness.

STI may fall; markets to remain stifled, says DMG
Tuesday, 08 June 2010

© 2010 - The Edge Singapore

CapitaMalls Asia:  Sell signal on the MACD histogram was confirmed today. MFI has been forming lower highs as volume shrank. The rebound in price has weakening technicals. I am inclined to believe that the symmetrical triangle would resolve itself on the downside.

NOL: Declining 20dMA is set to form a dead cross with the flat 100dMA.  Price has not been able to overcome resistance provided by the 100dMA on three recent occasions with the latest attempt three sessions ago looking tired. MFI formed a lower high after testing 50% as resistance a few sessions ago.  Since touching a low together with a low in price on 25 May, the OBV has been rising which suggests accumulation activity. This may well limit the downside for this counter.

Charts in brief: 7 Jun 10.

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.

FSL Trust off 3.3%; potential vessel revenue loss
Monday, 07 June 2010

© 2010 - The Edge Singapore

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.

STI falls 2% to 2,751.88 at closing
Monday, 07 June 2010

© 2010 - The Edge Singapore

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.

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.

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.