SPH: Up channel?

Although it formed a black candle, SPH is still trading above the eventual target price of $3.88 I set for the mini double bottom formed in May/June earlier. It is also trading above a cluster of MAs which should now provide some support instead of resistance. The next target is $4.08 if the mini double bottom is a valid pattern.

MFI is in an uptrend and this suggests strengthening demand. So, although there is a sell signal on the MACD histogram, we could be seeing the beginning of an up channel. If this pans out, then, buying at channel support and selling at channel resistance could yield some nice gains. The channel support is now at $3.80 or so.

Of course, if price goes parabolic next week, SPH could hit $4.08 very quickly.  Then, I would sell more of my shares.  A parabolic move in price is mostly unsustainable.

My plan? If price drops to the cluster of MAs, approximating the trendline support, buy some.  If price goes higher and hits the $4.08 target, sell some.

SPH off 0.5%; Eyes on 3Q10 results, 2Q10 GDP. Investors pausing for breather while awaiting media group’s fiscal 3Q10 results, guidance for coming quarters due Monday. Some analysts expect more upside for stock pending Singapore’s advance 2Q10 GDP data due July 14.
Friday, 09 July 2010

© 2010 - The Edge Singapore

Related post:
Charts in brief: 5 Jul 10.

Charts in brief: 9 Jul 10.

NOL: This counter touched a high of $2.07 which is the initial resistance identified earlier. Volume is much lower today as it closed at $2.06, 5c higher than the previous session. The MACD has crossed the signal line and returned to positive territory at the same time. OBV continues to climb, suggesting further accumulation is taking place.

What has formed could be a symmetrical triangle. With the negative divergence between price and volume largely corrected, we could see a breakout in the next session which could eventually see price testing the high of $2.35 touched on 15 April.  Before that happens, expect multiple resistance along the way.  In case price fails to move higher, immediate support is at $2.00.

Genting SP: Continues to be resisted at $1.20. Volume is declining. MFI which accounts for price and volume is declining and forming lower highs.  Demand is falling.  OBV is tired looking. The Bollinger bands seem to be in the early stage of narrowing.  Could the price move higher? With the 20dMA still rising, the shorter term uptrend is intact. It remains to be seen if the 20dMA could push the price higher. This is not for the faint hearted.

Genting Singapore target raised by UOB-KH to $0.97. Still, UOB KayHian is keeping its Sell call on view valuations pricey. Broker says non-gaming operations like Universal Studios Singapore theme park will continue to lose money in near term.
Friday, 09 July 2010

© 2010 - The Edge Singapore

Related post:
Charts in brief: 8 Jul 10.

Raffles Education: A spectacular white candle.

Volume expanded nicely as a wickless white candle was formed. Price broke resistance at 29c as provided by the 20dMA and closed at 32c resistance, provided by the 50dMA. Is this the extent of the upmove or would the price move higher? The RSI has been forming higher lows of late.  The MFI too.  Momentum and demand are positive in the short term but it could be a reaction to the oversold situation.  

If this is just a rebound, we could see the downtrend resistance at 33.5c capping further gains.  The MACD is rising but still in negative territory.  So, the possibility that this could be a short lived rebound cannot be discounted.

This counter has been in a downtrend since it peaked in Jun 09. Every single rally attempt was capped by downtrend resistance. Looking at the MFI over a longer period, we would realise that it has been forming lower highs since early this year. This affirms a longer term weakness in demand.  So, for people considering a punt, be careful.

We want to see volume expand more significantly, taking out 33.5c resistance, if a reversal should take place.  This would break out of the shorter term downtrend resistance.  Next resistance level would be at 35c then.

Tea with AK71: Hope.

I coined a phrase "Hope Analysis" aka "HA" a few years ago amongst my investor friends. This is a word play on FA and TA. In those days, I was a FA guy and not a very good one too. Did not know anything about TA yet.  Then, there were people who would buy stocks based on gut feel and hope for the best.  These were the people whom I called HA practitioners. Cheeky of me, I know.

Actually, there is nothing seriously wrong with HA.  We are human beings after all and there must always be hope or else life would be bleak indeed.  I remember receiving pamphlets in my letterbox when I was much younger with words in big bold letters: "There is Hope!".  Ok, ok, I am being cheeky again.

When we use FA, we can only hope that we have done a good, thorough job of it. We can only hope that things would turn out the way we think they should.  When we use TA, we might also hope that things would go the way we think they should.  Of course, some hard core FA or TA practitioners would say that hope should not be in the picture.  Some would say that FA is about skills and foresight and TA is emotionless and we should just let the charts talk.

More enlightened practitioners would realise that, whether FA or TA, there are no absolutes.  Everything is about probabilities.  The closest we can get to being absolute is therefore 99.9999%.  Ok, you might want to add more 9s if you like to infinity but you get the point.  99.9999% is as fine a gold bullion as we can get as well.  I doubt we can find 100% pure gold in this world.  Impurities? You bet. They are part and parcel of life.  We can reduce impurities but it is near impossible to eliminate them.

What about FA plus TA? Well, it is just another approach.  I dare say that HA has a place too. Good luck.