Riding On Momentum

Sold on gap up in the 1st hr yet? Remember the all important rule in trading. Gap up Sell gap down Buy. It does not work all the time but it works more than half of the time.

Going to do a short recap on Friday trading but will only be releasing the details for this coming week on sunday as there are still a lot of things that i need to analyze to see how low we are going to hit in this coming week and how the market will move. STI has nothing much going on on Friday but Dow sure pull out a super stunner with oil spiking around $11 and dow down almost 400 points negating not only the up on thur but broke support.

I will do a DOW chart here,will only put the STI chart on Sunday after analyzing all the possibilities.



Resistance 12496
Support 12188 followed by 12078
I believe for the first half of the week we should be within the 1st level trading range (12188-12496) I am looking more for a slight down to flat day for Dow on Monday and start to rebound on tues or wed.

However DO NOTE that any positions that you wish to open on Monday should be taken close to the closing time as i believe we may see STI getting slaughtered throughout the day with oil is approaching $140

I do not need to stress it enough,i already mentioned 3 weeks ago,the weakness in the market,all the indicators has cut down and the only way for the market is down,the only thing is the time factor how long it takes for them to go down.(MACD is under 0 for both my macd for a VERY LONG TIME roughly the time i call for the downward move)

This week was a down week but a REALLY choppy week for oil and dow no doubt and i believe the volatility of this size(up 200 down 200) should persist for another week or two as we setup for the continued drop,MAKE NO MISTAKE we will have a sizeable up on 1-2 days as we begin our descend down to to test 12,000. Projected timing,i'm looking for it to hit by the 3rd week of june 16th June.

Oil,it is driven by many different factors today and the fact that it's nearing $140 but do expect some pause or pullback day for oil next week as they have roar almost $17 in 2 days which to me is way more than excessive.

Short position still maintaining
Sembmar Short price 4.62

Open
Capitaland Short price 6.48

Will be advising on the course on action on Sunday night,i'll try to post it early so that everybody will be able to look at it and assess the pros and cons before you all go into the Monday which everyone is calling for DOOM and GLOOM.

There are many chances to make money in the market,the only thing is will you be able to pick the right 1 =)

STI is going down but we are not just going to crash and burn to 2800in 1 week so don't be overly concern though for those with still huge long positions you should be worried as this is not the end of the down yet.

Should there be any chart analysis request please post in the cbox,i'm now more focused on the direction of the index rather than on counters because i'm shorting and the market direction matters more to me then counter direction =)

Message of the day
p.s It will be VERY RISKY to short a counter on a gap down day

Below is what i add at 1pm as some of you ask me why i never say what counters i do on the day itself =)

Think through the meaning of what the sentence i bold,you'll find the chances to make money there,ytd i bold it'll be risky to long so what does this implied? Less risky to short isn't it? Sometimes have to look deeper beyond the surface =) nobody will spoonfeed you money but i've already dropped the hints. Now it's up to you what to do intra day,i can't monitor intra day till end of june hence i refrain from mentioning counters though when the win/loss ratio look good i'll still place the order =)

The bold means it's IMPORTANT,don't ignore it as that's the essence of the entire post,doesn't mean you all only read the bold though,lol take some time and read through everything and learn it slowly i may not be here all the time so end of the day the best person to believe in is yourself =)

STI was up 9 points on 1b volume,a sign that many people are staying on the sidelines.

Oil has rebound above 124 as of now,it came 1 day late but i am not surprise by the rebound as it had a steep drop this week,nothing goes down in 1 straight line just as nothing goes up in 1 straight line either.

Markets seems tired today as most counters drop as people pare holdings before a key data to be release in US today,the first one came in nicely(Jobless claim) now it's up to the 2nd 1 to be release when we are asleep(Consumer credit). I will be surprise if they continue to drop today though,now it's not a question of whether they will rise today it's a question of how much they will rise and how asia will react as Dow has shed about 250 points up till now as compared to last week. Asia seems to have decoupled from US as some asia market were still up despite US being down(sadly this does not include STI) due to the oil and dollar effect.(oil drop,dollar strengthen)

Short position
Sembmarine

Have close Wilmar today as the drop was a bit too fast,will be looking to short it again hopefully very soon =) still lots of downside.

Should dow close nicely tonight most counters should be gapping up tomorrow,good for those that have positions today,should be looking to sell into strength in the opening 1st hr.

There is a possibility that friday dow could go up again but it's a 50/50 chance but you have to endure the weekend agony if you hold. No one knows what can happen during the weekend. For now it's a period of if there's profit lock it or set a STRICT trailing stop,you will not want to lose money when it's already in your pocket.

As mentioned a few days back to stay away from Li Heng and Ferro,although they went up and down but eventually they close lower than where they were compared to a few days ago. China counters continue to be weak,i will be watching it to see when they start to turn and will inform you all should i see signs of it happening.



STI view
Resistance 3180 followed by 3224
Support 3085

Trading within a wedge,will not be doing any major move unless a breakout or breakdown occur. Volume was extremely light in these 2 days though. Light volume will generally result in a up day. That is what i feel at the moment.

Counters were just erratic going up and down with no definate direction. It is not a question whether they are going to drop it is a question how long they take to drop,that's my take for the moment.

p.s It will be VERY risky to buy counters on a gap up from my point of view

STI started flat to positive in the morning before reversing itself when europe open in the mid afternoon down by 19 points on 1.2 volume. Remember that i mention that we should test yesterday low again by this week or early next week,well it sure did not take that long,it tested it by today and went below it.

This brings us to 2 consecutive days of decent loss shedding by about 50+ points in 2 days. Counters were hit across the board but overall it is not a excessive drop, it's been some time since i can monitor live but am glad that i could do it again.

Oil has continued to drop today ahead of the inventory report,should they be well supplied still,oil might continue to drop further but do note that we have come off by a lot for oil in just 2 days,it won't surprise me if oil gets a rebound tonight. Though i'm still bearish for it for the coming few weeks that it will continue to come off but oil will be choppy,no doubt about that. Commodities counter started to get a hit as well due to the strengthening of the dollar as well as supply/demand issue. Do expect more volatility ahead for the commodities.

Short Positions that i have
SembMarine avg about 4.62 Closing 4.53
It sure didn't die swiftly and was actually stronger than kepcorp chartwise but it looks like it may finally start to accelerate,should they close even lower by friday,even the weekly chart will point to a correction in progress =)
Wilmar 5.46 Closing 5.15
Absolutely beautiful =)

Long positions
Have sold KS on a trailing stop at 2.11

Did not short cosco today as it doesn't look ready yet and limit constraint,swissco was in watchlist for long but no entry taken today as well cause the depth looks a bit weird end of the day it close at the same price that i began to find it interesting,lol

Will not be shorting counters until i have cleared either sembmar or wilmar. But i will be continuing to post potential long or short counters. Do exercise your own judgement before you follow any calls as like i said unless looking at it real time,it will be difficult to predict correctly what it will do beforehand.

Will only be fully available after end of june so don't expect me to post real time often. But do note that stocks can move randomly,what does not look ready to me does not mean it will not move up,it simply means i can't tell where it will go next(example sgx today,chart is bad but at least it went to 8.12 before dying). A good trader is not someone who is always right,he is someone who knows when he is wrong. Do remember this as this is the reason why different people can enter the same counter at same price but some can make money while some loses.

It is my passion to trade and hopefully steer people safe in this market. furthermore it would be nice to translate this into passive monetary gains =)

Remember that you do not have to trade everyday,if you make 1 good trade per week,it should already translate into very nice side income =)

STI dropped 34 points today with gainers/losers at a ratio of about 1:3

There were a few bright sparks today mainly news orientated probably jardine C & C and unisteel but overall it is a low volume day again with many counters dropping nicely. Any shorts made on counters recommended yesterday would have put you in the money by closing if you short around the opening.

I am not trying to instil fear in people when i say i believe there's more downside to be seen this week but rather a caution for those that are thinking of longing for fast profit,true you could profit but equal chance is that you could make a loss when market is overall going to go down.

To tell the truth i was surprise that sembmar did not close even lower today,it was one of the few that had minor losses. Ready to die or move up? It's hard to tell at the moment but since i am in the money and the indicators are still heading down for it,i see no reason to cover it YET. Could change by tomorrow though if i feel my profit is threatened.

Dow looks likely to end flat while oil looks to tamper off this session after failing to do so yesterday

Possible shorts tomorrow
Cosco
Resistance 3.4 3.45
Support 3.28
Do watch yzj as referance before deciding on any course of action for cosco

Maintain from yesterday
Wilmar
Midas
Sembmar

Long
KS Energy
Almost ready,crossing of 2.1 should see a likely setup for a continue push up for it.

Ezra at support,watch it carefully for those with a short position on it.

As stated yesterday all of these are CFD shorts and not intra day shorts or naked shorts

We came down near 3150 by today,a day eariler than what i expect,drop is probably a bit excessive hence tomorrow i believe we should be relatively flat to down slightly.

It has been interesting that china counters has been relatively weak for almost the last 2 weeks,added in my wl to await their awakening,currently they are not the sector in play hence be patient =)

Do consider any positions you intend to open this week carefully as main market direction for this week is down. It does not mean you cannot long but you must select it selectively and any runs can only be caught intra day and hardly on the day before.

Finish accumulating my short position in sembmarine by today =)

I hope all the bulls are still bullish even after seeing so many counters do a topping candle today. Had mentioned in the cbox last week that from a measured move point of view sembmar will retrace after hitting 4.7,today it briefly went above 4.7 to hit 4.73 before closing at 4.61 HAHA Nice? Topping candle still a 1 day signal,require tomorrow for confirmation =) First Support 4.48-4.51

For those interested,go look up for the rule of 3,i won't be posting it here because it will be too difficult to explain in 1 post but basically they are a method to project how much a counter will move before retracing.

Brace yourself for a roller coaster week as we go down to test 3150 support maybe by mid of the week. Oil has continue tumbling and should continue doing so BUT DO NOT expect it to go down in a straight line.

Dow was down 120 points as of now but no biggie,today is only the beginning and not the ending but do expect tomorrow to be milder for dow unless more bad news tomorrow. After a big move up or big move down it is common for it to be relatively flat the next day as it consolidate for the next move.

It's a bit hard to pinpoint which counter to long tomorrow since it's gapping down. Must see how they open tomorrow.

Possible Shorts
Wilmar
SembMar
Midas
Ezra

Do note that these are not intra day shorts or naked shorts but for CFD shorts ONLY,You do not exactly have to short tomorrow,i'm seeing more downside past this week,should they continue to worsen,it can still be put on cfd short =),don't be too anxious to cover back when you are slightly in the money but do always protect your profit and set a trailing stop, counters DO NOT go down in a straight line Do watch the live market action before reacting to this post because of a simple rule in the market gap down buy gap up sell. Unless you are buying else do not sell/short anything in the 1st hour,usually that is the lowest of the day.

Market Depth for STI for last week and today for losers gainers were roughly around 3 :2 guess that tells you what kind of market this is =)

By the way Counters to avoid at least for next few days Ferrochina,Li Heng. There are others but these 2 are in my watchlist base on FA factor but TA wise they have turned very ugly. Leave it alone till it stop falling. Never catch a falling knife

Do bear with me today for not having any charts and just words,got home quite late today so just doing a quick update

Review for STI



We got a nice bounce up over the course of this week but look at the chart closely,look at the volume on the down days and the volume on up days,with the exception of Friday which is window dressing,the volume is heavier on down days as compared to up days.

STI up a hefty 100 points last week,so what will happen in this week?

Expect a retracement back to 3150 AT LEAST whether we break it this week or not depends on how the data comes out for Dow this week. As mentioned in Cbox,i recommend starting to accumulate short positions in this coming week,we may get some support as i believe oil should continue to come down further this week. Possible trades for this week may come from counters that uses crude oil as raw material or by product.

Summary
Resistance 3240
Support 3150 followed by 3085

More downside than upside for this week for the index,look for the market sentiment and where the money is flowing to on Monday for direction for rest of the week(Vol increase price increase for counters)

Will update the counters to watch out for on Monday Night after assessing the market conditions. For the time being look at my Friday Recap on the 3 counters mentioned.

Economic Calender for Dow
http://www.bloomberg.com/markets/ecalendar/index.html

Do watch the indices of the sub sectors if you have free charting software(etc.Finance,Property,TSC,Hotel,Construction,Multi,MFG) Despite STI soaring near to recent high(3200),the indices of the sub sector were about 5-10% off from their high(varies between sectors) as compared to when STI was last 3268,be careful of finance and property sector

SINO TECHFIBRE LIMITED

Based in Longkou City in Shandong Province, Sino Techfibre produces polyurethane (PU) and microfibre synthetic leather products under the proprietary “Jinfeng” (金锋) brand name

EPS approx S$0.026
Net Profit S$24m
Annualise EPS S$0.112
For conservative measures,i'll assume a 10% increase in the remaining 3 quarters
Annualise EPS due to the following development :

PMP commencement approx in August 2008
Low utilization rates for its PU and microfibre leather in 1st Quarter 08 were caused by loss of production time as three lines were upgraded to meet growing demand for high-end products.

Based of Closing of 0.725 on 30th May 2008
Fwd PE Ratio 6.5x

Exciting Prospect
TPU and PMP will provide additional growth drivers in revenue and firm demand in PU and microfibre synthetic leathers will continue to contribute to the growth of the company.

Commentary by company : We envisage that our Group’s revenue will be significantly better in the second half of the year when our PMP business commenced

Risk : Delay or slow ramp up in PMP,TPU as well as weak sales growth,the company has enjoyed stable increase in margin despite escalating cost pressure and has one of the highest margin out of all the companies in the fibre sector,my own concern is its weak sales growth evident in 2 quarter out of its last 4 quarter.

Fair Value 0.90 peg to 8x 08

From a technical point of view


It has been distributed for some time,will it reverse anytime soon? Under all the moving MA and that is a bearish sign,should a rebound occur it may break 0.835cents to form a possible head and shoulder pattern? should it fail to hold at current level look for support at 62cents. Compelling Buy should it drop to 52-55cents range unbarring any major bad news.

Ratio Of upside to downside : Good

Projected TA value : A break of 88cents will see next resistance at 95cents followed by $1.05

Wait for consolidation in the months ahead,i believe it may trend down to 62cents should the current support fails to hold. Not doing any patterns at the moment,will update further as it plays out in the weeks ahead on entry price.