Wing Tai

Wing Tai is one of the first counter that I came to know of when I first started trading. However, it did not attract me until a few years later (2001-2003). I was still learning to trade and did not make much out of it. For one thing, this is one long living index stock would is quite affordable at bottom of the market, compare to many other counters.

Wing Tai was on my watch list but I did not take action until recently partially because its gain in percentage is not as good as the lower priced stocks. Nvertheless, it caught my attention and I kind of caught the last wave but still got my hand burnt a little bit.

I enter the counter right before the final leg and managed to catch the wave. Unfortunate, I had a miss in monitoring (for a few hours) and the stock plunged on a surprise from 1.90 to 1.70 on the very day. It was way beyond my stop loss but I still executed the action at 1.74. Now what is next for Wing Tai?


Fig 1 Wing Tai Weekly Chart

Base on the latest up-date, Wing Tai is on continuous down trend on weekly indication. The counter is nearing the trendline and about to test its potency. Both RSI and Stochastic is moving south with divergence to confirm. Having their position at above 50% tells that there are possibly more to go. I do not see any pattern forming for a measurement but base on its 21 weeks moving average, the support level at this moment is 1.54 while 89 weeks moving average at about 1.50. If there is a pattern forming, the neckline is likely at 1.56. I do not see any up-side for the time being.

A short break, and there are good and bad news on STI

It has been a while since I last up-dated my blog. In fact I have a pause since last wednesday. It was my youngest brother and the last of my family having his wedding, and he chose Hari Raya period to do so. I travelled back to my home land to attend his wedding, deliver a big Ang Pow and of course help out.

The wedding took 2 days because he could not book the banquet on 20th Sept 2009. So we have the day event on 20th while the dinner set on 21st. It was a grand event since my parents are business people. We have datok-datok and Datin-datin attending the dinner. Well, I wish them a happy marriage from here, though I still have one question in mind. How is it that my brother choose a girl with so much resemblance to my mother in attitude?

Another reason that I have not done any up-date was simply because there was no need to. What I have last entered still valid and the market went side way. I am still amazed that the newspapers still trying to support the theory that the market is recovering ( of course they may be right ). I personally believe (copy from Miss Teen USA, she really have a problem answering why only 5% of Americans can find USA on world map) there is limited up-side and there is a strong tendency for a correction. The market simply lacks wood to burn.



Fig 1 STI weekly chart

My last review indicated STI broken the Daily trendline but still supported (barely) by the weekly trendline. Well, base on what I see in fig 1, not any more. It has now broken the weekly trendline. Minimum a correction soon, if not a full retracement, assuming this is only the first wave and we are coming down with second. As far as I can see, the technical set up do suggest a bottom formation still in progress. Some analyst made known that the economy might be having a "W" shape recovery rather than a "V" or "U". "U" is out of the question because the shpe now looks more like "V".

Purely on technical term, let's not talk about alphabets, but reversal pattern. STI could really be doing a double bottom reversal and the shape would take more than a year to complete. Worse case would be a tripple bottom or head and shoulders ( taking not that it might not have bottomed which is still waiting for it at 1,300).

If I keep thinking of a bearish tendency, then what's the good news? Referring back at the chart, I wonder if anyone notice the crossing of 21 weeks moving average against 89 weeks? It is so far the only positive sign I see. However, this also normally means a correction ( some how base on my experience, the chart always correct to touch one of the moving average when a golden cross is made). So with this golden cross,should we still consider a bullish market?

What a day!

After many years of on and off trading from the market, I have learned to spread my portfolio to spread the risk, and noting that about 70% of a chance that I would get a wrong counter for trade, I would normally pick 4 to 5 counters to played with, all the time setting stop loss level for exit strategy. I know, some times it is quite hard to even think about exiting because of stop loss. I have learned from hard lessons that a bigger consequence if I do not follow the stop loss strategy.

On my last entry, I noted a triangle formation for STI chart. STI broke through and went up the next day. If I recall correctly it was Thursday when this happened. I was happy because finally STI is on its way to 2,809! I was not that happy when I saw the chart that night.

Fig 1 STI Daily chart

The chart showed that STI gap up and formed a shooting star. This is a bearish indication. The next day (Friday) was not better neither, it opened wth another gap up from the previous day's close. However, the index retreated throughout the day and closing lower than previous day's close. I guess it qualified to be a confirmation for a bearish tendency

I was into position on 4 counters till this morning. While I have indicated warnings on all my counters which was recorded in my homework, I did not count on the market volatility since this morning. STI fell a total of 24 points gapped down! All my counters were in red. By 11:00AM, 2 of my stocks reached the stop loss level and I have to bailed out immediately, loss were however manageable.

I was still hopeful on Wing Tai which chart I read still green on my record. It fell from SGD1.90 but was still holding on SGD1.85 the last I looked at 2:30PM. I guess it was possible that this counter would still hold above my stop loss level. By the time re check on this counter again by 4pm,I was shock...well shock was not really the word for it since I did not find it so serious. The counter reached a low of SGD1.74, well below my stop loss at SGD1.80. I took immediate action and exited the trade. Good thing is that my money on this counter was also small and the loss is managable.

But still, what a day, I would normally won't find a single day when all my counters hitting stop loss level. So what about STI. The last I mentioned abou this index, it was doing a false break on daily but held on by weekly. This time round it broke the prudent trendline both daily and weekly. My indicators Stochastic and RSI both turned south on daily and weekly (with divergence down). So my 2,809 is likely not in sight as yet. My guess now is that a huge correction is coming and STI retreats to a gentler slope. Its support level fall back to 2,592.

Cosco the laggard

I went for a dinner the other evening at a new restaurant around Block 72 of Pipit Road. It was a small eatery called Hippo Family Restaurant. It was named after the owner's son's favourite toy. The food is good and the price I guess is reasonable, considering SGD3.50 for fried noodles, rice and stuff while SGD4.50 for a single dish. Of course with this price one should not expect how big a plate it is. Still the taste is up to my standard for such a price. The restaurant was a crowd attraction since it opened.

While striking a conversation with the owner's wife, happened to be Chinese national, she mentioned to me that she worked in Cosco for the past 8 years. This got me interested into this counter. Turned out this counter is quite a popular topic on ChannelNewsAsia.com market forum.

One thread started in January 2007 and lasted 1,000 over pages. I did a brief follow up on the thread and noted that the thraed starter predicted Cosco to move since January 2007, yet it was only until mid 2007 that Cosco started to ramp. Another thread has the thread starter complaint that Cosco was a total disappointment because it had not even moved after all these while.



Fig 1 Cosco since 2000

I also noted that this counter has been in bottom formation since October last year. Back tracking further, the whole life of Cosco seems to be a turn off for traders(noting the flat performance since 2001-2006, then 1st half of 2007). So it seems like Cosco is a real laggard and boring but if it moves, it rockets.

So what has Cosco been doing lately?



Fig 2 Cosco Daily chart

Like always, it dragged its feet since October last year until recently (May 2009) that it started to have some movement and eventually a tringle. The problem now is that it is dragging its feet and very reluctant to break out as demonstrated the last few days, it kept dropping back into the triangle.

Today is of no exception, it broke out to 1.33 and then returned back to 1.30, below the triangle envelop. I can't really blame this guy because it just happened to meet the Gann Grid Resistance today forcing it to retreat. the worst thing is that this guy now formed a shooting star indicate a down tendency, a confirmation is required tomorrow (opening lower is part of the indicator).

The break out point as read the last few days were SGD1.301. My RSI and Stochastic is not helping neither, one says up one says reversal. So tomorrow is a day of monitor for this counter.

STI delimma

I have been reading some of the forumers contribution these few days on the market.Basically what I see is same old same old all the time, people predicting up, people predicting down, people asking why like that?

My last up-date on STI indicate a possible false break on STI and it is a show of weakness. Ever since then its weakness continue to show. It is clinching onto the trendline support/resistance the last few days, just when it looks like STI going to make it, it retreated today. So what has been happening.



Fig 1 STI daily chart

Apparently STI is in a process of forming a triangle and it is edging towards the upper resistance line. The breakout point is 2657,STI tested and retreated, seems to me it has not enough momentum just yet.

Singapore takign a second dip into recession?

I have been looking more at STI chart recently. Although I managed a measurement of target 2,809 in my earlier studies, STI recent movements are somehow disturbing. If the measurement is right, it should be on its way there right now, instead the movement has been very sluggish.


Fig 1 STI Daily chart

STI's performance today is especially worrying. Most importantly, it has broken through its trendline support on Daily basis. I would normally take this line to be relatively sacred and crossing it means major trend reversal. I have anticipated it to do so but expected a level of 2,800 at least before such move. Apparently, I might have missed something in my wave count?

The daily indicators are all pointing south with increasing momentum. Not only the index broke through its trnedline support, it has also broken through the 21 days Moving Average at 2,581 and support of 2,592 seems to be a goner.


Fig 2 STI Weekly chart

The weekly chart is more optimistic, although the indicators are pointing south, there is no divergence. The index has not yet violate any indication of reversal. Somehow the trendline support in on a different level and is presently supporting the index at 2,565, although with some false break. Further to that the 2 moving averages that I am using (21 weeks and 89 weeks) are about to meet with a golden cross. Thus it is still possible that today's move only contribute to a correction with false break on the trendline.


Many people also question if the crisis is over? some predict a "V"shape recovery, others talking about "U" shape. So which one is true? To study this we must look further back in time.


Fig 3 STI Weekly chart since 1987

Base on a longer time frame, we can see 2 dips before the crisis we have this year. The first being the notorious 1997-1998, the other is 2000-2003. So far there is no "U" shape recovery there, but there was a "V" (Spike) and a "W" (Double bottom). Taking the rule that History repeats itself, adding to the weekly the indicators revelation, I am betting on a double bottom or even a tripple bottom formation on STI, this means a long and cold winter in this region. If I am right, then the Government has made their cash withdrawal from the reserve a little bit too early.

Nikkei225 and politics

I was on the Channel News Asia Forum today when I came across this thread with the starter trying to draw parallel between Nikkei 225 and the result of the recent election.

The writer wrote that the Nikei fell as a result of the opposition being voted into power and warned that Singapore's market might react the same way if such a change also happen to the political system of Singapore.

I counter argued that the same happened when PAP was voted into power in 2005 ( or somewhere there), so did it signify that the market did not agree with the result? In true fact, the market will fall no matter who win because the price has already factored in the result.

Unfortunately the only thing this guy (I think nick name BigCanonKing) reverted to searching for spelling and grammer mistake to intimidate his opponents rather than involve in genuine debate on the matter. It does show how much wisdom he has.

So now the question is: Does the market approve of the new ruling party? Going back to March 2009, there was a by-election in Japan and the opposition won, and the market reacted. It was because the event was a news and market was not prepared for it.



Fig 1 Nikkei 225 Weekly chart

Referring to the chart, one can easily see a gap up of about 2,000 points on Nikkei. This happened right after the news broke out on Sunday that the opposition won the by-election. To summarize, the market has not factored in this event.

What about the general election that happened over the last weekend? Seriously if we looked at the chart, nothing happened. If I recall correctly, major markets in Asia were having their free fall, yet, Nikkei 225 barely move, in fact there was a gain on the index. It went even higher today before retreating. I estimate that the market is not reacting because it is watch the move of the new ruling party before it makes its next move.

Nevertheless, the RSI and Stochastic on Nikkei indicated that a correction is in order soon. In addition, the index is meeting the downward trendline and at this moment, I think it has not enough momentum to break through.

What I wish to see is that Nikkei break its multi-years bear market and for once reverse its fortune, at least lives of the people there would be better. Let's hope that this new government brings live once again to Japan.