Technical Analysis – 5th March 2009

To be frank, I half suspected such a turn out today. A rebound in the morning, only for it to drop by afternoon. What happened instead was, it had a rebound for some 1 hour only. In fact even before HSI opened, the sell off sorta began.

We did not have a proper rebound which made me feel kinda apprehensive on going short. I prefer to play short at resistance strategy. Instead, this scenario may need to play on breakout instead.

Here’s ST Eng which I shorted couple days back. Very nice downtrend line resisting any upside. Add that to the MA resistance above. Tell me this is not a good shorting counter? It is fantastic.  ST Eng however is known to have kelong closing. So far so good. The CD is supporting the price, but there is only so long it can support.  Using fibonacci projection, it appears to be at 50% now.  With resistances above, 61.8% is quite a good area it will be looking for soon. So let’s see how 2.20 behaves.  My TR Jay reminded me bout something when we decided to short Cosco. I’ll go into the chart soon but here’s what he reminded me. “In a bear market, resistances hold and supports crack”. I sorta let that slipped my mind! I guess I was too obssessed with waiting for rebounds. It may happen, it may not. If it does, 1580 is key. There is a gap resistance there, and a gap fill will bring it to 1580. Just nice.

I closed my cosco days back and today I re-entered it with a vengeance. Successful retest of support turn resistance at 76c.  MA resistance at 80c and 84c to protect me.  Ultimate cut loss is 88c which I highly doubt will be tested in the near term. It will become a possibility if MACD turns positive.  Looking at indicators, there is a chance it may test 80c, but I do not expect it to close above it.  On the downside, my TP is 62.5c.

Why do I say 80c? Downtrend line, and the hovering 20MA should cap any upside around there. Those 2 lines are moving lines by the way and will head downwards over time.

I still have half my shorts in StraitsAsia. I did not enter new ones today, cause there is a slight descending triangle (so super small, some won’t even call it) and a small bullish divergence on MFI.  Today’s high was capped at 82c. There is a chance it may head higher, but a bullish div in a countertrend bear cycle is generally weak. So let’s see. 82c again, I may add more shorts. I queued but did not get any today so I did not bother chasing the price since I still have half my holdings.  The level to watch for is 75c. A failure there may see 63c and subsequently previous low at 56c re-tested. I will follow this as it develops.

Banking stocks.. what can I say. Been taking a beating. I am still holding my SIA, waiting to add one more. Its new resistance seems to be 10.22, not even touching 10.40 at all. Support 9.8, with one weak one at 9.7.

UOB, look out for 9 as a critical support. DBS is at 7. OCBC.. damn I don’t even know. Let me see.. 4 is possible, and then 3.8.. dating back to 2002.

CityDev, very very weak.

What does this bear cycle tell us? A lot of bargains in due time! SIA at 8, SGX at 3 perhaps. Just off the top of my head.

Accumulate cash, and be prepared to buy. Not yet, but you should have at least half your warchest ready for bargain hunting already, and working on the other half!