Daily STI - update

Hi there! Market was pretty volatile during the last week. So far, the 2245 level has been proving to be pretty tough level to break. Last week, the STI looked in danger of a trend reversal when the MACD almost crossed. It has since bounced off and looks like it may try to cut downwards again. But volume was pretty light during the last two trading days, so it looks like a case of profit taking. The trend is still up and the most recent candlestick looks like a bullish engulfing pattern. So i would say that its still quite safe to continue holding on to your long positions.

COSCO - an update

Here is a daily chart of COSCO Corp. You should notice by now that this chart, and the daily chart of Capitaland, are all very similar to the daily chart of the STI. So you can get a pretty good picture of the general behavior of the market by looking at the behavior of the STI. And like Capitaland, the price of COSCO has fallen close to its support at $1.70 after breaking strongly out of it 6 market days ago. And again, i would suggest getting out of COSCO if it breaks below $1.70 and to wait for the uptrend to be established before buying in again.

Capitaland - support holding?

Here is a daily chart of Capitaland. I suggested sometime ago to buy when it breaks out of $3.00. However, over the past 8 trading days after the breakout, it has been steadily losing momentum (as seen by the falling MACD). If the price of Capitaland breaks below $3.00, i would suggest to stop buying or cut loss, and to wait till the uptrend resumes.

STI - losing momentum

STI failed to breakthrough the 2245 level and is current hovering just above 2135 (the low made 3 trading days ago). The MACD has turned down and is just about to cut its own EMA line (the blue line). If the MACD does cut its EMA, then i would suggest to stop buying anymore equities and to wait till the momentum turns up again before buying. I think it would also be prudent to take profits or to cut losses when this happens.

STI - daily update

The STI has been behaving strangely these past 2 days. Looking back, there was a bearish engulfing pattern on Monday. That was a potential reversal signal, but over the next two days, the index did not close below the low of the bearish engulfing pattern. So it wasn't a very strong reversal signal. The market tried to rally today, but was pulled down by heavy selling in the late afternoon. Looking at the Western indicators, the slope of the SMA (simple moving average) is still up, the slope of MACD is also up, but the histogram is coming down (indicating a decrease in momentum). Overall, the trend is still up, but those trading on a shorter term basis may want to be a bit more cautious due the high volatility of the current market condition. I suspect that the index may want to move closer to the SMA before bouncing off it (like what happened in late Apr 09).

Noble Group - weekly update

Noble Group is a major supplier of agricultural, energy and industrial products. Like the behaviour of companies affected more directly by the financial crisis (such as banks and property companies), the bottom of Noble Group's share price was reached in Oct 08 when the whole world was gripped by panic amidst fears of a global financial meltdown and global recession. However, unlike banks and property counters, the price of Noble Group has reversed sharply from its lows and has been trending steadily up since. The share price is now sharply higher after it broke through a major resistance level of $1.43. It has just broken through another resistance of $1.66 and i think the next target of $1.86 should be hit soon.

All we have been reading in the newspapers lately are stories of doom and gloom, with lots of fussing over the state of America's economy, housing market, banks, auto companies and in Singapore about retrenchments and the shrinking economy. But do take a step back and have a look at how the share prices of major companies in different sectors (eg: commodities, oil & gas, palm oil) are behaving . The future does not appear to be so bleak.

STI - weekly update

For this week's update of the STI, i decided to display a line chart instead of a candle chart in order not to clutter up the chart and to show you what is happening now and is likely to happen in the near future.

Just to recap, STI fell from its peak of about 3900 in Oct 07 to around 1600 in Oct 08. It then traded in a parallel consolidation pattern before making a new intraday low of 1454 in Mar 09. After that, it managed to break through the upper band of the consolidation trading range of 1850 and finally through a major resistance of 1960. From this point onwards, there are very little major resistance levels. I drew one at 2245 because there was a bit of consolidation around that level in early Oct08. The next major resistance level that i see is at 2745 (based on the major low in Mar 08). So based on what i see on the weekly STI chart, the mid-term trend is up and i think one should trade on the adage 'the trend is your friend'.

Noble Group - Brokeout of $1.43

One counter which has just broken out of major resistance is Noble Group. From the chart above, you can see that the MACD lines have just cut, giving a buy signal. Also, the price closed above the resistance of $1.43, thus giving us two buy signals for Noble group. Volume is also much higher than that of the previous week, confirming strong buying support for the move up. The next resistance is at $1.66.

Capitaland - Poised to breakout of $3.00

After its failure to breakthrough $3.00, Capitaland consolidated over the past 2 weeks and looks poised for another attempt to breakout of $3.00. MACD also looks poised to give a buy signal (red line crossing blue line). I would suggest to go long for Capitaland upon successful breakout of $3.00.

STI - breakout from 1960

Today, STI broke out from a major resistance level of 1960 to end up at 2028. Uptrend for medium term is still maintained. Next possible level of resistance is 2245. Major resistance is at 2745.