Sunday, January 31, 2010

STI- looking bearish

STI is currently at 2745, just under 100 day Moving-Average of 2751. Next 2 weeks will be very important for STI. Failure to recapture the 100 day MA soon could lead to even more downside. Look for support at 2710 and 2660. A weak rebound might happen next week.

Also a bearish crossover of the 34 day EMA over the 13 day EMA (both fibonacci numbers) was recently seen on the STI on 27 Jan 2010. The last time this happened was on 15 Jan 2009 and the STI subsequently declined by 15%. This does not look good in the short-term for the STI.

My general investing/ trading tips

Here are some of my general tips:

1. Don't chase a stock simply for the sake of chasing it, unless there are supporting technical indicators( eg. breakout in price and volume)

2. Look to volume as a supporting indicator. Increasing volume confirms the trend. Decreasing volume on increasing price shows that the trend is suspect.

3. Go for value. (to be determined by FA) "Price is what you pay, value is what you get."- Warren Buffet

4. Try to see the bigger picture- the long term view over the next 6-12 months. Don't be overly focused on the short-term.

5. Employ good TA( technical analysis), FA, money management, risk management and emotional control (taken from createwealth8888)

6. Look at investor sentiment as a contrarian indicator. Quite reliable at predicting market tops/bottoms. In Mar 2010 the % of bulls was only 2%, whereby the market soon bottomed.

7. The stock market is a leading indicator, forward-looking by 6 to 9 months. The market usually bottoms out or peaks before the economy. So buying stocks when the news is all good may not be a very good idea.

8. Always do your own research and analysis before making decisions on whether to buy or sell. Don't always take analyst's recommendations for what they are. People might have their own motives or intentions for their stock calls.

Purpose of this blog

The purpose of this blog is to :

1. Consolidate and express my views about the local and global markets, as well as investing in general.

2. Provide a collection of useful links to informative stock blogs (both local and US)