Thursday, May 26, 2011

Cosco: reversal ?

Cosco 52 wk high : 2.44 ( 19 Jan 2011)

Cosco 52 wk low: 1.32 (27 May 2010)

Candlestick: White candlestick with little shadow is a testament to the bullish sentiment and a possible reversal.

MACD, Stochastics: Turning up, no negative divergence. Slight positive MacdH divergence.

Resistance: 2.01 (200MA) , 2.08, 2.17

Support: 1.90, 1.79-1.8

Today Cosco closed at 2..00 (+2.4%) with high volume of 34.9M shares traded, double the previous day’s volume of 17.3M shares. This is a positive sign as it shows accumulation as the up volume today was significantly higher than the previous day’s down volume. Also the low of 1.89-1.9 was successfully tested for 3 days in a row (20-22 May), affirming the strength of that support region.

Another positive sign is that out of the 34.9 M shares traded, 27M, or 77% of the total amount, were transacted at 1.97 or higher, which is above the previous close of 1.96. 8.4M and 17M shares were transacted at 1.99 and 2.00 respectively, so there should be decent support in that area. If cosco keeps on making higher and higher lows, it could well be the beginning of a new uptrend.

The chart shows a potential double top at 2.40-2.44 but this will not be confirmed unless the neckline at 1.80 is broken convincingly. Cosco still remains in its uptrend which has been maintained since the lows of 2008. As you can see the lower trendline has been tested (or come close to being tested) convincingly several times , showing the strength of the trend.

Cosco seems to be resisted by the 200MA at 2.01 now. It is therefore at a critical point now, if it clears the horizontal resistance and 200MA at 2.01, it has a good chance of retesting 2.08.

I took a small position today at 1.99, after observing the surge in volume which accompanied the buying.

2 possible strategies:

1) Go long when 2.01 is broken to the upside on high volume

2) Go short when 1,79( Mar low) is broken to the downside on high volume.

Thursday, April 14, 2011

Straits asia: facing selling pressure

Today straits asia closed at 2.54 with above average volume of 7.8 million shares.

The full black candlestick with no shadow indicates that selling pressure is still strong. The closing at 2.54 is just below the confluence of the 20MA and 100MA. Straits Asia had been trending up on the upper Bollinger band until recently. The 100MA at 2.50 may also provide some support.

RSI is trending down and MACD is on the verge of a bearish crossover which will probably happen if another down day occurs tomorrow.

Straits asia also appears to have broken its uptrend channel which is a bearish sign. Expect more downside if the uptrend channel cannot be recaptured.

Strategy : Watch whether the 20MA at 2.55 can be regained, if not it is quite likely that the support of 2.50 will be tested, followed by 2.40. Be cautious as MACD is about to form a bearish crossover.

Friday, April 8, 2011

STI: Still going strong

On Friday STI closed at 3187.31 , the 8th consecutive day of gains, and 13th positive day of the last 15. The gain from the yearly low on March 15 of 2919.98 is 267.33 points or 9.15%. The index is still some 3.8% below the 9 Nov 2010 high of 3313.61. It is also worth noting that April is quite a bullish month for STI with 7 of the last 10 Aprils resulting in gains.

The top blue line on the chart shows where STI is at now.

Indicators are nearing overbought territory with the RSI near 70 and closing near the upper bollinger band. However today's close at the high of day shows the bullish strength of the rally and indicates that the index could even move past the 3200 level after a correction.

I am expecting a brief correction for STI to the 3120-3150 region. Support at 3110-3120 should be especially strong as 3110 is the neckline of the double-bottom pattern and 3120 has been tested successfully before. In a more bullish scenario STI might only correct to 3150, consolidate and resume trading in the next band at 3180-3220. Stronger resistance is at 3220. A good thing is that there are no negative divergences..

Strategy: Reduce holdings as STI is currently overbought and refrain from taking more long positions until there is a correction.

NOL : Out of downtrend ?

Today NOL closed at 1.99 with good volume of 27 m shares traded. Prices touched a high of 2.01 which was again not sustained into the close..

Things seem to be brightening up for NOL as it seems to have moved out of the downtrend channel and into a slight uptrend(see chart). Also it managed to close above the 20MA. Sustained closes above 20MA would indicate that the trend is indeed changing. Important resistance is at 2.02 as this level was tested unsucessfully several times in the past. If 2.02 is taken out, 2.10 will be a possible target. Immediate support is at 1.94, However STI is currently overbought and I think the price is likely to see consolidation for a few sessions before moving higher.

I also noted that the Bollinger bands are tightening, indicating that a large move is near.

Why I bought NOL at 1.93 last Friday?

1) Gentler slope of downtrend indicating that selling pressure is easing

2) Slight positive Macd /RSI/Stochastic divergence as seen in the chart. Prices made a new low but Macd/RSI/Stochastics edged up.

3) Strong support at 1.87-1.92 region (Aug 2010 low, Fibonacci support)

All these factors indicated that the downside is minimal and so I took a small position.

Watch the next few sessions. It will be a good sign if the price can maintain above 20MA and 1.92 is not broken.

Monday, March 28, 2011

NOL: Still in downtrend

NOL's price has been constantly weighed down by high oil prices and closed at 1.93 on high volume of 31.7 m shares today.

First take a look at NOL's long-term chart. The stock was in a steady uptrend since Apr 2009, after which it broke its uptrend on 20 Feb ( see next chart) and failed to close above it. After this trendline was broken, NOL started falling more rapidly. In fact it had already been in a downtrend since 5 Jan when it peaked at 2.40, forming a series of lower highs and lower lows but the broken uptrend further confirms this and makes it more bearish. NOL has also been continuously under its 20 day MA, which is falling with the 50 day MA, confirming the downtrend. This counter looks more like a candidate for going short although even for bearish stocks there are still opportunities for going long. The green line shows the 1.90 level which is quite an important support level.

Important support: 1.89-1.90 (24 Aug 2010 low, 38.2% retracement from 2.40-1.04) , 1.75 (May 25 2010 low)
Important resistance : 1.98, 2.02

MACD and RSI are still trending down which is bearish. The price has also failed to close above the 20 day MA indicating that the trend is still down

NOL is trending downward and the upper downtrend line at 2.01 is also acting as resistance as NOL always experiences profit taking around that level and it also made a large move lower today on high volume. Price is also below the 50 day MA and 200 day MA at 2.12 and 2.08 respectively.

Strategy: Possibly buy around 1.90 which is near several important support levels and near channel bottom. For a downtrending stock, buying at top of channel is a strict no-no. Take partial/full profits at top of channel. Buy on breakout of downtrend channel if accompanied with high volume, preferrably after sustained closes above 20 day MA showing that trend has reversed.

I usually prefer to buy strong uptrending counters on temporary weakness than buy weak counters on breakout as it could be a fake breakout.

STI is finally taking a pause today after 5 straight up days last week. I am pleased to have taken profits on CityDev at 11.72 on Friday.

Thursday, March 24, 2011

Noble Grp : Testing upper downtrend channel

On 24 March, Noble Grp closed at 2.15 with average volume of 31.6 m shares traded.

Resistance levels : 2.16( downtrend resistance, green line) , horizontal resistance (orange line, tested on 18 Feb, 7-9 Mar),
2.25 ( 3 Mar high) , 2.32 (7 Feb high), 2.40 ( 13 Jan high)

Support levels: 2.07, 2.00, 1.94 (15 Mar low)

Indicators: MACD, RSI and Stochastics turning up

The defining features of the chart are the downtrend since 13 Jan that Noble Grp is still in, as well as a potential double bottom that may have formed at 1.94-1.96, on 24 Feb and 15 Mar. The steady rebound from the low of 1.94 further proves that 1.94-1.96 is a strong support region.

Noble also bounced off the 200 day MA of 1.94 on 15 Mar which is a good sign, indicating that sentiments are still bullish,

Noble closed just shy of the resistance at 2.16 which is fairly strong but if it can be broken with healthy volume 2.25 could be seen in due course. If the downtrend channel (green line) is decisively broken, Noble Grp could resume its uptrend movement and possibly test 2.40 in the future.

On another positive note, STI managed to recapture 3040. Hopefully this resistance will become support.

Tuesday, August 31, 2010

Singtel : bullish reversal or technical rebound ?

Singtel's price hit a low of 2.92 on 16-17 Aug and has since rebounded somewhat to 3.05. Is it a bullish reversal or merely a technical rebound?

I bought Singtel at 2.93 on 23 Aug. Some reasons for buying-

-Prices have been tagging the lower bollinger band for several days. Better than average odds of reversal.
- Prices were nearing long-term support of 2.86-2.90
-RSI is bordering on oversold, around 30
-Presence of candlesticks with long lower wicks from 17 Aug to 23 Aug. Although the price traded as low as 2.92, prices never closed lower than 2.94. This suggests strong support in the 2.92-2.93 region and that the selling pressure was easing.
-Spinning top candle on 19 Aug, suggests indecision and possible change of trend.

As of now, prices have rebounded to the 3.05 region, right in the middle of the bollinger bands. Prices are in a slight uptrend, as you can see from the chart, but are probably in consolidation mode. A bullish MACD crossover was also observed on 30 Aug. Prices are also just above the 200DMA(3.04) but slightly below the 50DMA(3.06). There is some pretty strong resistance at 3.10, which is the high of 10Aug before prices dropped to 2.92, while 3.00 should prove to be strong psychological support.

I would be bullish if 3.10 can be broken with high volume, however I feel that any upside will be limited to 3.10-3.12. For now, I am still holding.

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