Capitaland - Double bottom

i was looking at the chart of Capitaland and wondering what to name the title of this post. I knew that the price was going to break through $3.00 (OK, not knew, but chances are high that it would break through that price soon). I don't really want to call it 'breakout' again as that would be a bit boring. And suddenly I saw it! A double bottom on the weekly chart. And with this realisation, i can now project a price target for Capitaland once it breaks out of the $3.00 level. The projection is computed by measuring the price difference between the pivot (the $3.00 level hit in early 2009) and the line joining the bottoms (which is slightly less than $1.90 since the second bottom is at $1.70, but never mind. i'll use $1.90 to be a bit conservative), giving $1.10 and then adding this to $3.00, resulting in a price target of $4.10. And what a coincidence! $4.10 is remarkably close to a major resistance level of $4.13. My suggestion for an entry into Capitaland would be similar to my suggestion for COSCOCORP: buy upon price breaking through $3.00 on high volume.

COSCO - An update

I am not sure what to say about COSCOCORP. Its performance over the past month has been nothing short of breathtaking. Most of the time, i could only watch with disbelieve as i witnessed an unending stream of buyers snapping up whatever shares the sellers were offering. It has broken through key resistance levels of $0.775 and $0.905 and is now soaring towards the next resistance of $1.16 at higher volumes.



Above is a daily chart of COSCOCORP at a much wider time scale just to show you where $1.35 is with respect to its current price. I suggest buying COSCOCORP once it breaks $1.16 on high volume.

Capitaland - Nearing key resistance

It is only the second day of the week, and already the action is getting fast and furious. Above is a weekly chart of Capitaland. The medium trend is up as indicated by the rising MACD lines and the upturn of the Simple Moving Average line between the Bollinger Bands. The key level to take note is $3.00. Capitaland closed today @ $2.92 on quite high volume. The volume on the weekly chart is falling, but take a look at today's volume on the daily chart:





A huge bullish candle, on high volume, bouncing off support of $2.70 and reaching for $3.00. I think a good trade would be to go long once Capitaland closes above $3.00.

STI weekly - spinning top

It was a short trading week last week due to a Good Friday holiday for most markets. Above is a weekly chart of the STI. I titled this blog 'spinning top' because last week's price action resulted in the formation of a spinning top. (A spinning top is a candlestick formation with a short real body). It indicates indecision in the market. The STI has been closing higher for the previous four weeks, but last week, the bulls and the bears were about evenly matched so that the STI only closed marginally higher that the previous week. The trend is still up, but i suspect we will see some consolidation next week.

DBS - An update

I have not commented about DBS for about 2 weeks, so i thought i should write a little about it now. In my last commentary, i showed a monthly chart and mentioned that a hammer was forming, but that i was not sure as i had to wait til the end of th month to be sure. It is now a little past Mar09, and while Mar09's candlestick is not exactly a hammer as it has an upper shadow, nontheless, it is a bullish candlestick signal with its long lower shadow and a close above the middle of the previous month's candle.



Looking at the weekly chart, DBS appears to be a stuck just below the $9.20 level. Since the weekly trend is up, i would suggest buying DBS on price weakness. A breakout above $9.20 should see the price heading towards the $10.30 level.

STI - Elliot Wave

Today i watched a video in which a guy fits Elliot Waves into an S&P500 weekly chart. He managed to fit three waves and mentioned that the S&P500 is currently on the fourth upwave and that the fifth wave down will take the S&P500 to the 500-point level. (It is currently at 842). For this view to be invalidated, the S&P500 needs to trade above 930 (or around there). I wonder if this is the case for the STI. I pulled up the STI weekly chart and drew in what i think are the major up and down waves. (The lines are in thick yellow). Voila! I managed to draw five waves!; three major down waves and two minor counter trend waves. (If i read Elliot Waves correctly, the theory says that a major trend consists of five waves; three in the direction of the major trend and two counter trend waves. Thereafter, a reversal?) According to what i managed to draw, the STI completed its five waves down and is time for it to rally. Really?

Maybe some people will draw the waves differently and conclude that we are only at wave four. i suppose they are, or maybe were, busy shorting the market at every rally, hoping to be early in catching the major fifth wave down, but finding themselves caught at the wrong side of the trade and having to close their short positions. I believe this is one of the reasons that this 'rally' that we are seeing since early March is so strong. People who went short discover to their horror that the market is racing ahead and so they close their short position by going long. People at the side watching the market roaring ahead cannot stand waiting at the sidelines anymore, and so they too jump in and go long, thus adding more fuel to the 'rally'.

Be wary of people hyping up the current market conditions by saying that this is a bear market rally, or that we are only at the forth leg of Elliot wave and that a major fifth wave down is coming, or that we are now in an 'overbought' situation and that a correction is imminent. Look at the chart objectively and as far as possible, go with the trend. Of course you may trade counter trend, but you need to be much more nimble in getting out when the trade goes agains you.

Daily STI - revised

Grr...This morning's STI chart really confused me. Down day on high volume means that the trend is very likely to continue. So i was very puzzled by the little rally we are seeing across Asian markets now. I had another look at the STI daily charts and i was a little comforted that the huge volume i saw this morning was some data error.

Yesterday's down day was on light volume. Unpleasant for those caught on the wrong side of the market, but it means that people are taking profit; not selling down. From what i can see at mid-day, there seems to be good support at 1676. No doubt the STI closed below that yesterday, but it bounced off that level today and appears to be holding well. MACD and stochastics are both declining, so what to make of them? Well, the STI, based on the weekly chart is still on an uptrend, but looks like is taking a breather.