Technical Analysis – 23rd April 2009

A pretty quiet day today but I did some trades.  Took profit for IndoAgri on opening cause I was out of office. Later in the day it was clear a breakout occurred so I went back in, using my profits as ‘risk’. JPMorgan was the party that sold to me. Clearly the BBs are in the counter which is good for a trade. Target for now is 1-1.03. Wilmar also broke with heavy volume. I did sell off my holdings but I will look for confirmation tomorrow with a breakout play at 3.60. Again I think BBs are in play.

StraitsAsia is interesting. Very quiet and subduled. Jay thinks the BBs are holding back the price to prevent it from surging upwards as their attention is focussed on other counters. Let’s see if he is right! By the way, BBs refers to ‘big boys’ They are the institutional players. They only have one goal. That is to trade to make money for the company. Be it futures, forex or equities, anything goes. Most of the time they squeeze money out of the dumb money.. which unfortunately turns out to be the retailers. BBs don’t win all the time, but they do have the capacity to spike a counter with volume. What I do look out for is BBs distributing. We won’t really know till it is done. The idea is  to pull the price up so that retail folks get in to push it high with them too. When they are done they will slowly distribute. Did I catch a distribution? Maybe.. but looking at price action they are not done yet. It may ‘rest’ for a session but as long as support holds, that’s fine.

I also went in short on UOB, while Jay went long on SIA and wilmar. Oh yar I queued for Olam and I got it too just before matching. SIA had low volume which makes if volatile. I shall see how it goes tomorrow. My short on UOB has a very near cut loss. The immediate candlestick resistance around 11.20, which is near 100MA at 11.26, as well as a high at 11.32. A breakout on that, I will run. Trading short term seems to work in this current climate. I did my calculations… if the STI does break out onto 200MA, the certainty to go short from there is relatively high. For now.. sector in play is clearly oil and commodities.

For breakout plays, taking profit fast is key.

I will post some charts over the weekend.