Weekend Review

Let’s take a peek at the indices as promised.

Flipping to the DJIA, essentially it seems to be trading sideways still. Indicators have not turned bullish and I am maintaining a neutral bias on it as the set-up is not very ideal for buying. But it is not ideal for shorting either and I thought I’d make that clear. It looks set to be choppy into the shortened holiday couple weeks left, but projections are showing a fairly good chance of a rebound from January. Naturally if we somehow get ugly sell offs till end December then that projection may be negated.

Looking at the HSI. Still holding it’s breakout level and moving sideways. Don’t have volume data which is a pity but it will be nice to see the range resistance breakout. Notice, it is a strong resistance as there’s a gap resistance from there till around 16000. The gap fill has not be complete.  Look for either side to breakout. I will hate to see the major resistance turn support (breakout level) get crushed.  However the probability of it advancing upwards is around 65% based on my calculations. That is not a big amount which explains why I did not increase the number of call warrants I have bought on it.

Onto the STI WEEKLY chart. This is not the daily chart.  To be honest, I do not like what I am seeing. We desperately need to clear 1912. 1820 was tested on Friday and I warned of a pullback purely based on a hit on that resistance. 1912 will be stronger yet but yeh, I do not like the pattern on the weekly chart, especially it coming with reduced volume. The 20W MA is still down which is not surprising while the 200W MA is heading flat. To be fair, 200MA on the weekly chart is like 4 years back. For it go to flat, it sorta tells at a glance (and at a glance only) we have probably visited those levels back then again. We have pierced 20 weeks ago, 50 weeks, and 100 weeks. If we also pierce 200 weeks and it begins to turn down, ugly ugly ugly. Keep watching 1912 guys… I cannot stress how important this level it is.That is from a technical point. On the market, people aint gonna begin buying till they are convinced of the trend. Let’s face it. Humans will be humans. All those who thought they could ‘buy low sell high’ over the year and caught a falling knife instead will be wary. I do not think they wanna catch another falling knife. But let’s face it. Another nice rally, and people go in, and then if the market plunges right down to where I think it would, people will truly give up. Total loss of confidence and they’ll think “oh well we are gonna head back to 800″ and if I hear that then I am fairly certain it won’t. Fact is, it is not over. We have had too many sucker’s rally and too many people caught that knife, so they are definitely not gonna begin buying. Are we forming a bottom right now? Maybe. But we will only know after it has formed. I have a rough idea of whether I think it is based on some calculations but I’ll leave out what I think for now. Perhaps if it does prove to be accurate I’ll share how I derive my own proprietary conclusions.

Let’s take a look at Allgreen. Alvin will love this. Look at the volume the day after we discussed it. Huge volume. But what happened? It ended up a failed breakout. It was able to hold above breakout level for most part of the day but came back down. All the breakout chasers would need to close their positions and may have contributed largely to the volume. I did go in long on Friday with a few lots on margin.  But have not added anything cause at 4.50pm the price looked horrible. I prefer to do my final additions around that time only.  Support will be strong at 42c while 46c remains as resistance.

Yanlord is pretty obvious. I queued to sell my contra at 1.05 and it got hit. So Now I am left with  half my holdings since I have sold off half to take profits. I was pretty sure the resistance will not clear this round but wasn’t absolutely certain. The prudent thing to do is to take half. It has now developed a reversal candle so let’s see if it does get confirmed, or if it negates and decides to move further up. Either way I have nothing to lose. Support remains at 92c which is resistance turn support.

Capland.. classic breakout with nice volume. Noticed how the first double bottom failed to breakout. Not enough volume. This time round it has succeeded. Will I buy if it comes back down to re-test 3.27? Hmm.. I will see then. Personally, I feel that the property sector in play is gonna be over. Question, what is next in play? Ahhh… flip to your charts… and see which heavy weights are still hovering around 20MA and have not participate in the rally so far. Now, if these guys don’t move, the rebound on the STI WILL lose strength. Period. We need the participation of our big guys.  If they begin to move, we could break 1912. So, don’t you think it is time to monitor those counters now for bullish signals?

So keep the above in mind… I will post ‘that’ stock soon enough..

Watch out for cosco too. But remember where the STI stands. It has NOT proven a bullish feel yet and it is VERY possible that 1820 resistance can’t be broken and it cracks all the way down to close the gap support.

Remember, key technicals. In a bull trend, resistances will break will support will hold. In a bear trend, resistances will hold while supports will break. In a sideway trend, both will appear to hold. Now go write that on a piece of paper, burn it and drink it. Believe me, 3 very simple ‘rules’. And it can be the only thing that makes either profits, or losses for you.

As of today, I remain neutral on STI, HSI and DJIA. The probability of an up or downtrend is not high enough. I will not be adding / cutting positions till a side is clear. No more buy calls for now. That time has come and gone.