Year End Review of Dow Jones, Nikkei and Hang Seng

We have finally come to the end of 2023. Today is the last day of the year and I thoguht to myself, " what shall I write?"

May be the best thing to analyze are the 3 major indices to me: Dow Jones, Nikkei and Hang Seng. 

I am elevating the time frame to monthly chart for this purpose.

Fig 1. Dow Jones monthly chart

My last update on Dow Jones is Is Dow Jones reversing as well? dated November 5th 2023. That was about a month ago.

I was skeptical that Dow Jones on reversal at the time, I believe that Dow's major trend was down and that it was in the beginning of a counter wave move to retest its previous high. I expected the major trend was still down.

Well, it did retest its 61.8% projection resistance and also the previous top of 35,679, and not only crossed, it went higher and surpass its previous peak of 36,952, reaching a high of 37,778 this week. Well, may be Dow Jones has decided to end 2023 with a boom.

So what is going to happen next?

On its minor move, Dow Jones seems to have hit the 100% projection resistance, calculated at 37,481, with 127% projection resistance of 39,127 next. It is possible that Dow Jones will open with a correction downward, may be to its 61.8% projection of 35,169 before heading higher.

In its major move, it is yet to reach its resistance zone of 40,295 to 47,454.

These are the technical readings using Fibonacci projection. However, I find the gradient of its climb is gentle. As such I believe that it may have limited upside. 

Fig 2. Nikkei monthly chart

My last update on Nikkei was Nikkei moved! on November 4th 2023. I was positive of Nikkei with an estimate objective of 33,425. Nikkei reached my objective and hit a high of 33,853 before retreating and supported by its 21-week moving average. 

By the end of the year, Nikkei is retesting its previous high, closing at 33,824 by the end of the year.

What is expected of Nikkei in the coming year then?

The chart maintains its support for an uptrend as its moving averages are still in alignment. While the final month demonstrated a potential hanging man, the bar was not hung high above the previous bar. It does not give me the feeling of reversal, instead it seems more like a correction or congestion to me.

For the time being, I see a few resistances for Nikkei. On minor move, it is close to reaching its projection zone of between 35,493 to 38,530. In its major move, it is congesting at its 61.8% projection of 33,249. The next resistance level will be 38,655. 

Fig 3. Hang Seng monthly chart

My last update on Hang Seng was Dow Jones, Nikkei and Hang Seng Up-date 1st Oct 2023 dated October 1st 2023. In addition, I have an earlier entry titled Hang Seng on continuation...again.... dated August 19th 2023. 

I am in conflict in my view on Hang Seng, it is on a down trend, at the same time, I believe it is in a counter wave move with a tendency of up thrust thereafter. 

If based on its double top formation, Hang Seng has yet to reach its 61.8% Expansion support of 13,509, not to mention its 100% expansion at 8,794. If these levels are coming true, Hang Seng is pretty screwed.

For the moment, I prefer to depend on its projection calculation, the levels are more realistic and relevant. Hang Seng has reached its 127% projection support level before it rebounded. At present, it is close to retesting its low of 14,597 and its 127% projection support of 15,480.

Hang Seng closed at end of the year at 17,047 with a hammer. It seems that Hang Seng hopes to start 2024 with a new beginning. It will be interesting to see what will happening in the coming year. If it decides to move up, we will likely see possibility of 22,077, which is its 55-month moving average resistance.

Hostile take over at Disney ...

Disney under the leadership of Bob Iger is really not doing well. 

While it did well in the early stage of Bob Iger's leadership, it began to deteriorate since the end of Marvel Universe movie Avengers: End Game. 

It seems to me that this movie marks the beginning to the end of his leadership. It is not surprising as Disney has already started to introduce the diversity ideology into its movie messages. Instead of entertainment and fun, audiences are introduced to sexual content of paraphilic nature as well as feminist nature. 

We began to see movies including the need to highlight women are better than men, women are strong and independent, and it is the men who pull them back, in another word, the evil patriarchy is why women are not succeeding. 

In addition, it also brings in the idea that white people are the result of the sufferings of the non-white, attempting to pitch the non-white against the whites.

The new movies after Avengers End Game also have an increase emphasis on homosexual relationship, attempting to normalize homosexuality. 

 Its implementation is not limited to only Marvel universe, but every other production under its wing, such as Lucas Film and the Princess series.

Naturally its implementation fails to gain acceptance by its audience. Not only its movies fail to profit, but its theme parks are also losing visitors. 

What is the direction of Bob Iger? To increase intensity in its diversity drive.

It is no wonder that the shareholders became unhappy. News began to spread recently of Billionaire investor Nelson Peltz demanded Disney to allow an increase level of influence from his team, that is, appointing his team member as board of director. 

Disney under Bob reacted negatively. 

As such, there is possibility of hostile takeover by Nelson Peltz unless Disney refocus on profitability in its strategy. 

"As these developments unfold, Disney's stock has become a volatile indicator of market sentiment, reflecting the uncertainty surrounding the company's future." (Quoted from SK Pop)

Fig 1. Disney weekly chart

The only thing that I wonder is, " why it takes so long for the shareholders to finally act?"

Looking at the chart, Disney fell from its top of 203.02 on 7th March 2021 to a bottom of 78.73 on 1st October 2023. If it because that only at this point of time the stock price of Disney is finally affordable?

I believe that Disney is at market bottom at this moment with limited downside. 

It rised from its latest bottom and presently retesting its 55-week moving average. While retracted, it seems to refuse to continue downward, supported by its 8-week moving average. 

Disney is at an uncertain position right now, there is a tendency of down slide but with limited range. The general direction should be up.

There are 2 levels to increase the certainty that its position is reversed: 103.91 and 118.18. 

There is also a projection measurement with resistance level between 99.81 to 112.84. These coincide with both 89 and 144-week moving averages.

Note:

One thing that I failed to mention in the article is the support for my view that Disney is at its bottom. This is my second attempt to write this entry, there are a lot to cover, and I went off course on my first attempt.  

There are 2 observations to support the bottoming out of Disney. 

First is the slope of ascension and decline. Its ascension is steep while it took a long while for Disney to reach its latest low, forming a very gentle slope.

Second is the divergence of its MACD. It is interesting to see that for every new low, the low of its MACD went higher. While lower highs resulted in higher high in MACD. This has been happening since mid 2022.

Probably the only thing it needs to rise further is confirmation of Disney making 180 degree U-turn on its direction.

Tesla and the challenges for EVs

Electric vehicles (EV) have become more popular nowadays. I am seeing more Tesla and BYD on the road, even though there are many challenges for these to become mainstream. These challenges, however, really require strong determination and really technological breakthrough to achieve this.

Let's consider the standpoint of the driver, whom should be the EV's primary audience. There are a few barriers that EVs need to overcome to convert. 

The primary set back of EVs is its battery. 

To start with, EVs' battery can only allow a maximum mileage of 300KM. This is only on full charge and the battery is new. With repeated charging and the battery age, the mileage per charge will deteriorate, as to how much? I am not sure. But considering the charged-up usage of my mobile dropping from 2 days to 1 within months (with careful charging). I am in doubt the battery of similar material can maintain high utilization after 1 year or so.

The limitation of the battery mileage is especially a con to EV users especially for those who needs regular long-distance trip. Me for instance travel between Kuala Lumpur and Singapore, each trip is at lease 350KM one way. This means that I need at least one charging even before I reach my destination, I do not have such issue with gas driven vehicles. This brings me to the second limitation, its charging.

Full charge requires around 30 minutes, which is a long time as compared to a less than 5 minutes work for gas refill. Even a quick charge needs about 10 minutes. I still remember witnessing a Tesla charging station while on business trip in Hong Kong many years ago. There was a long queue of Tesla for 3 charging stations. Time is money and it really not worth the wait.

"But it is more environmentally friendly."

Is it true?

Have the environmentalist look into the manufacturing of EVs, especially the electronics and its battery design utilizing Litium ion?

While electronics or digital design of EV enable greater safety for drivers and passengers, the manufacturing process is far from environmental-friendly. The production of ICs for instance introduces dangerous chemicals such as gallium and arsenide. 

Energy storage for EV utilizes Litium. The extraction of material for Litium and its compaion materials such as Cobalt poses environmental risk such as water pollution and endangerment of human and animal lives. while Litium is a component in the making of Litium ion batteries, it is rarely recycled as compared to the more valuable metals that is also used in the production process.

Moreover, the production of Litium ion batteries as well as the electronics requires the use of rare earth, which again poses environmental corrosion in its process of extraction. 

While many claim that EV uses electricity instead of fossil fuel leads to carbon emission. Many ignore the fact that EV charging now come from power mains which in many countries uses carbon combustion such as coal and natural gas. It is a zero-sum game. 

Moreover, now you are buying energy from a single source instead of multiple sources. 

I made an entry last week on BYD and at the end of that chapter, I mentioned that I will look into Tesla since I have put one foot into EV companies.

I did an entry on Tesla quite some time ago in Tesla..... dated 19th Dec 2022. I was puzzled at the time why Tesla price was heading south when Tesla was a hit in the market. More people were adopting EVs as their vehicle of choice, and being a leader in EV, its share should be going up.

I estimated its support level to be between 137 to 205. 

Tesla bottom out at 101.81. It then reversed and start climbing upward, reached its peak at 299.29 before retreating. 

Fig 1. Tesla weekly chart

However, in its decline, it crosses the previous top. This makes the whole move between Jan to Jul 2023 a 3-wave pattern. 

Even on its decline, it exhibits a congestion behavior of which previous lows are violated. It seems to me that Tesla is still in a counter wave move.

Relatively speaking, it is at present meeting both the upward and downward objective and it is difficult to say if its general direction is up or down from here. Considering its movement from Jul to Oct 2023, I will say that there should be a continuation upward.

Its reversal upward since 29th Oct 2023 look congested and lacking in upward momentum, trapped within a channel. Moreover, as of 26th Nov 2023, it reaches the downward trendline, I foresee further decline after this. 

You may find the 2 paragraphs above contradict each other. I believe that the general direction is still upward but it needs to first come down. For the time being, I do not have a support level for this guy other thn its prevvious low of 194, breaking this, next level to watch will be 152.

Something is wrong with Straits Time Index (STI)

 I am relatively relaxed today, I have completed my weekend tasks yesterday, including an entry to this blog. 

I woke up early this morning and practiced my sketching skill set, I just kept experimenting on figure drawings, training myself from sketch of single person to 2-person interaction. 

By 10AM, I felt that I have done enough of my sketches, and it would be good to do something else.

I have decided to turn on my laptop and aimlessly checking on charts. A thought came into my mind, " maybe I should take a look at STI."

I seached through my archive and was surprised that my last input for STI was One refuse to go down, one refuse to go up... in February 2021. That was more than 2 years ago!

In that update, I estimated an uptrend for STI with an objective of above 3,500.

I never thought that I should be surprised by the STI chart, except that I was.

Fig 1. STI weekly chart

To start with, while STI climbed up north since then. it failed to reach 3,500 and stopped shoert of crossing the previous high of 3,466, only to manage 3,408. All these whiles, divergence was observed on MACD with lower high on every single peak from STI.

 Started with its gap on 21st March 2021, STI has in fact gone side trend and forming what looks like and island reversal pattern with a potential double top reversal with a neckline at 2,968. 

What's more alarming is its recend decline since 30th Jul 2023 from its peak of 3,392, that came with a surge in trade volume. Even though the peak volume was observed on its reversal from the moving averages, that surge of volume did not translate to momentum upward.

Instead a larger volume on its decline seems more consistent.

This formation is 3 years in the making, quite consistent with the time needed for a top or bottom formation.

As of this week, there are 2 moving average crossing noted, the 55-week crossing 89-week and 21-week crossed the 144-week. 

Things are not looking good for Singapore if STI enters bear market. Evidence from its previous major declines, the slope of bear for STI is very steep.

If this is true, I suspect Singapore will enter another round of recession for the next few years. Tough time will however, not be felt in 2024 as STI has just begun to fall, it will be at the bottom off fall when the market feel the pinch.

 

BYD car Singapore made?

While watching youtube.com recently, I came across this advertisement about people being interviewed mentioned about working in automotive manufacturing. Then while I was driving on the road I came across this sticker on a BYD car "BYD, Singapore made car".

This stirred up my curiosity, " has BYD set up factory in Singapore?"

If this is true, then it is possible an indication that Chinese companies are moving their manufacturing over sea. 

This is very similar to the situation in Singapore during the late 90s. Government policy of " benefiting thy Neighbour" plus unfavorable economic condition of Singapore in term of cost led to the exodus of manufacturing facilities to China. This created massive retrenchment in the country and displacement of profession in area of PMET (Professionals, Managers, Engineers and Technicians). 

This phenomenon lasted until now, with many former PMETs forced to change their professions to survive, most ended up driving taxis. 

I was one of the lucky one then, choosing to enroll myself into a Graduate Diploma in Business Administration, then changed my profession to be at the front end, landed myself in Sales and Marketing, extending my career by another 23 years.

Back to BYD. A search through the net shows no indication of BYD setting up a plant here. Hyundai on the other hand, set up an innovation center in Singapore.

Nevertheless, it will be interest to check on BYD as it is one of the leaders in electric vehicles.

Fig 1. BYD weekly chart

I am using the chart of BYD from the Hong Kong stock exchange for this. 

It is interesting to note the stagnation before a surge in 2020 reaching its peak by 26th June 2022. 

However, between 2021 till now, it seems that BYD is creating a top formation, with a very choppy behavior. While it seemingly rise up since 30th Oct 2022 till 30th Jul 2023., the pattern is of a 3-wave formation, counter wave, couple with a steep fall from its peak, I will have to assume it will continue downward. 

An interesting thing to note is the MACD which through the years been declining with lower high while BYD chart reaching higher. This is sign of divergence, indicating its reversal tendency. 

The peak on 30th Ju7ly 2023, however, is a confirmation.

By this week, it has crossed its 144-week moving average, and closed below this support level. 

I suspect BYD will correct upward retesting the moving averages before its continuation.

The major support for BYD will be between 109 to 174. 

For the time being it has crossed its 61.8% projection at 210, coincidentally close to its 144-week moving average of 218. This may be the cause of a pause or correction for retest the moving average supports turn resistances. The next level of short-term support will be 184. 

Since I have started on BYD this round, I will check on the bgi brother of EV in my coming week, Tesla.