CPL, CMA and NOL: Resistance levels to look out for.

We had a very nice rally today. The upward march on the STI was almost uninterupted all the way from the start of the session. In an earlier blog post on 17 October, I mentioned that there seems to be a bias for further upward movement and it has taken almost two weeks to materialise.

Now that a rally is underway, for investors who are already vested, do we ask if the rally could continue tomorrow? No. We should ask if the rally were to continue tomorrow, where are the resistance levels? We should be looking for exit prices.

For investors who are not vested and who are knocking themselves on the heads for being overly bearish, they want to know where are the supports so that they could consider buying on pull backs. However, given the strength of the rally in Europe right now, chances of a retest of supports could be rather slim. If I had missed the boat, so be it. That's my take.

For CapitaMalls Asia,  a long white candle tested the high of 17 Oct at $1.31. Overcoming this resistance level will see a cluster of resistance levels ahead: $1.33 as provided by the declining 100dMA followed by $1.36, a many times tested resistance level in early September.

In very bullish conditions, we could see the gap at $1.395 filled. Where should I place my sell order? As is my usual style, I will partially divest at each resistance level.

Capitaland could test resistance at $2.71 as a white candle was formed today on the back of very much higher volume.

If $2.71 were to be taken out convincingly, we could see the gap at $2.79 filled eventually. Before $2.71, we have the declining 100dMA to contend with. This MA approximates $2.68 in the next session.

NOL formed a nice white candle today on the back of relatively high volume. Immediate resistance is at $1.19, the high of 13 Oct. Given the momentum of the upward movement, chances of a continuation in the next session is high.

Overcoming $1.19 would see $1.24 and $1.27 as the next two resistance levels, the 123.6% and 138.2% Fibo lines respectively. $1.27 also approximates the position of the declining 100dMA.

With container shipping business very much in the doldrums, the 138.2% Fibo line could be a strong resistance, if tested at all. Remember that 38.2% is also a golden ratio.

Good luck.

Tea with AK71: Healthy and economical lunch.

What am I having for lunch today?

This is easy to prepare and to bring to work. Easy to wash up too.

This meal is high in fibre and full of natural goodness. Lower in glycaemic index than ground oats, I also prefer raw rolled oats to instant oats which are pre-cooked and dried.

Although instant oats are convenient, just add hot water and they are ready to eat, they are not as chewy, flavourful and nutritious. Anyone in the know would tell you the less processed, the better.

How do we prepare something like this? Remember this? Tea with AK71: A healthy low cost meal.

A healthy lunch that is also gentle on our wallets. I like it.

Mind Your Money: Budgeting.

I have the pleasure of watching "Mind Your Money" on XIN MSN this evening. The first episode is on budgeting. It is basically about managing personal cash flow.

If people were to ask me how I grew my money, I would say that I spend as little as possible and save and invest the rest. So, it all starts with budgeting.

I wrote a piece on wage slaves before which attracted quite a few comments. Obviously, people who spend as much as they make are not about to grow their money since there is nothing left to grow.

If you find that you have been working for a few years with reasonably good income but you are not saving much money, if any, this program could be for you. I think it is quite good for anyone who has never done any budgeting before.

Watch "Mind Your Money": http://video.xin.msn.com/watch/video/episode-1/1gqq74i6l?cpkey=6b6b1cb2-3c96-4fcc-9001-271abc9c19fa%7c%7c%7c%7c&src=v5:share:sharepermalink:&from=sharepermalink


Related posts:
1. Wage slaves should be fearful.
2. Money Management: Needs and wants.

Further credit tightening is almost a given.

I was talking to a friend whose family controls a public listed company in Singapore and he is very optimistic about Singapore, very confident that we will not suffer a recession. Although I reminded him that in the last global financial crisis, only China, India and Indonesia escaped a recession, he remains very optimistic. Is this optimism the norm?

Many think that the housing prices in Singapore are being driven up by foreigners. Numbers released not too long ago shows that foreigners accounted for some 16% of condos sold so far this year. The rest were sold to Singaporeans and PRs. If I remember correctly, PRs accounted for 5% or less of total HDB flats transactions. So, the vast majority of transactions in residential real estate here belong to Singaporeans. Logically, a great number of Singaporeans are doing well.

Indeed, if the recent astronomical COE prices are anything to go by, I would say that people and companies here are doing extremely well. Therefore, a pervasive sense of optimism and even invincibility is not difficult to understand.

Personally, I have a blog post not too long ago which questioned whether there would be a double dip recession or whether we would simply see very slow growth. Do I have the answer? If I were to say I do, would you believe me?

Do I know anything for sure? I know that if there should be a prolonged slowdown in the world economy, Singapore will not be spared. I know that if there should be a credit tightening in the world banking system, Singapore will not be spared. Singapore has a very open economy and to think that we will be spared any negative ramifications is simply naive.

In order to stay optimistic about Singapore's economy, we have to be optimistic about the world economy and we have to stay optimistic that there will not be any significant credit tightening in the world banking system. Do you think it is easy to be optimistic about these?

"In July, banks and insurers agreed to contribute to reducing Greece's debt via a 21-percent writedown on their holdings of Greek bonds... But recently there has been growing speculation that Athens needs to reduce the value of its debt by 50 percent -- or perhaps even more -- to make its finances sustainable." Read article here.

This speculation is likely going to be a reality.

"Diplomatic sources said Europe and the IMF would only proceed with a second planned Greek bailout of 109 billion euros if banks accepted losses of "at least 50 percent" on their debt holdings." Read article here.

This is going to be disastrous for European lenders holding Greek debt. How would this affect us in Asia?

In a discussion I had with my father a few weeks ago, I told him that we could see European lenders tightening on credit and recalling funds from Asia where they have a significant presence.  Although this could be a welcome development as Asia is sloshing in funds in search of higher returns, resulting in strong inflationary pressure, people and companies who have thus far done well by leveraging on cheap money could suffer.

I am not an economist but some form of credit tightening with the proposed Greek "debt haircut" of 50% is more likely to take place than not. I can only hope that the negative effects will not be as fearsome as some have made them out to be.

For any who recently borrowed to the max buying a dream private property or a dream car at record high prices here on our tiny island, I can only hope that the dreams will not become nightmares.