Big Money

Genting: time to take profit

admin — Thu, 26 Aug 2010 03:47:05 +0000

Genting share has amazing rally over past 4 months by doubling its price. For market capitalisation of around 20b this rally is too fast and the good news mostly have been discounted. Just imagine the company is having 10b more in market cap in the last 4 months. It’s just insane to believe that the company would earn so much money within such short time.

Let’s analyse it from technical perspective:

Weekly Chart
The weekly chart below indicates an extended rally which needs cooling down.
Lastweek bearish shooting star still valid and becomes the resistance for this week’s gain. As long as it stays below 1.68 I remain bearish.

Daily Chart
The rally from chart $1.30-$1.68 was on very heavy volume. A very heavy volume at the top mostly signifies buying euphoria. The past 1 week consolidative gain is on low volume.
There are 2 scenarios that might happen:
1. Either selldown continues
2. But there appear to be vested interest by some parties to keep the stocks at high level for a breakout before distribution.

The best re-entry would be around $1.31-$1.36 level.

S&P500 roadmap till Sep 2010

admin — Wed, 25 Aug 2010 12:40:59 +0000

US indices have been losing ground over past 4 trading sessions and the chance of technical rebound is highly likely as it’s in shortterm technical oversold situation.
My target for S&P500 hitting the 1000 mark still valid despite only 50 points away (It has dropped from 1129 to 1051) over past 3 weeks.
The picture is the roadmap till end September with possible rebound from recent oversold situation with target around 1080-10100 before further downward move.

Seasonal bad months from September to October

admin — Fri, 20 Aug 2010 01:56:06 +0000

September and October are usually bearish months. With the bad economic news recently I don’t think, the market will go much higher from this level. The chance of correcting is much higher before we’re resuming our bull trend in the last quarter of the year.
Attached is my prediction I mentioned since June this year that this rebound will hit 150MA (and it happened) before correcting towards 1000 level around end of September or mid October.
4Q rally will see major short covering and it’ll create impulsive upwave by breaking into 2010 high.

Take a look of 2 head and shoulders formation:
1. The big H&S will fail
2. The small H&S will bring the index down in September.

Below is the seasonal period for S&P500 for the past 37 years:

Conflicting signals -> manage your position size

admin — Thu, 19 Aug 2010 14:41:46 +0000

In current volatile market I constantly need educate my clients on conflicting signals in the market. Certain stocks can be very bullish but the bigger indices could be forming bear formation.
- Oftentimes I said, indices have hit the top, and I was right. But the certain stocks could still be thundering higher.
- Indices could be plunging but some stocks stay resilient.
Ultimately the main indices would rule the direction of overall market. It’s only at the turning points we will see a large conflicting signals whether it’s topping or bottoming process.
From my experience as a broker, my clients prefer to hear one side of the story and of course something that favoured them. The problem is that they do not see what I see in this market, and this could be a missing link in my passing of messages to them.

Today one of the client asked me whether Biosensor is a good entry at breakout level.
I spotted activities in Biosensor yesterday (see Biosensors:ongoing accummulation) but few seems to be interested into buying at low price.
And today market became hot and a number of people started noticing positive activities in the stocks and would like to participate in the buying side.
One of the stock in the top volume is biosensor and it fits all the positive technical breakout with above average volume.
In normal market this type of breakout would have 80% chance of followthrough which means it will move higher over next few trading days. As we’re in less than bullish market with conflicting signals (after recent run up) I would weight the chance of success is only 60%. Instead of carrying over our usual position size, we need to be nimble with max 1/2 of our usual position.
The Dow futures which was positive in the afternoon (SG time) has finally turned red due to less than rosy jobless claim. What happen to Biosensor tomorrow? Would it sink? or would it be thundering higher?

If you’re not over exposed you may not be worrying too much with tonight’s outcome. The problem with traders are they only look at potential profit and forgotten potential loss. Managing position size is infact not less important than looking for right entry/exit.
And in fact this money management will determine how much you will profit in the market in the long run.

Biosensor: ongoing accummulation

admin — Wed, 18 Aug 2010 07:37:13 +0000

Biosensor rose more than 4 fold from its $0.225 low and the shallow correction in May only reaffirm that this stock is stil on its uptrend.
The past 3 months narrow trading range with the shape of uptrending triangular formation signaling ongoing accummulation.
The immediate resistance is at $0.83 with shortterm target at $0.90. A medium target of $1.30 is more likely once they get more approval in different countries (probably by Mid 2011).
Today it just announced that its Drug Eluting Stent System is approved for sale in Taiwan.

If you’re interested on research report by Nomura for Biosensor please contact me.

Deeper correction into September

admin — Mon, 16 Aug 2010 02:58:25 +0000

Follow up from bearish rising wedge which I posted last week:

Despite gain in some stocks such as Genting and Statschipac as well as strength in Hangseng, they do not picture an improvement of market breath.
Potential of further rebound to digest recent loss is very likely but the overall sellers still outweigh buyers.

I expect August to be slow month and mostly the stock will trade within a range.
A possible bigger move could be in September and statistically this is a very bearish month.

This morning the Japanese gov just announced slower growth:
http://www.cnbc.com/id/38717422

Let’s see how market unfolds.

Technical reading: Osim

admin — Mon, 16 Aug 2010 01:14:25 +0000

Osim is the most oustanding performer in this bull run.
I’m still bullish despite sharp run up in its share price and I believe, we could see the price revisiting $2 in the coming years.

As i’m a swing trader prefer to ride short wave of the trend I’m looking for further pullback towards $0.88 by early September followed by strong rally towards $1.18 by the early November.

S&P500: Bearish rising wedge

admin — Tue, 10 Aug 2010 03:13:43 +0000

The US market has greatly ignored the worse than expected economic news. It’s a lesson to be learned that market is selective in its reaction to the news.
It is not the news that maintain the market movement but it is the momentum that keeps market going. However market won’t be going forever in one direction, it is either consolidates or reverses its main direction, depends largely on underlying fundamental.

Generally we’ve seen a number of commonly traded stocks on the pullback while the unknown pennies are dominating the top volume in Singapore market. This is a very common phenomena where the market players have lost their trading ideas and bring up the pennies as next trading target. The retailers who look at the big gain will mostly be enticed to trade the pennies and they’ll mostly be the victims in this market.

S&P500 rising wedge
S&P500 rose on tight range and ignored all the worse than expected economic news. What concern me is the rising wedge formation which is a bearish price formation.
The psychology behind the bearish rising wedge is the loss of upside momentum on each successive high. A trend will reverse if a price momentum weakens.

At this stage of market the preservation of capital is more important than looking for capital gain.

Hangseng at resistance

admin — Thu, 05 Aug 2010 02:27:29 +0000

Hangseng is at the top of the channel and pullback is more likely than any further rally.
Personally I feel, overall market direction is dictated by Shanghai’s movement and this can be seen with my earlier posting
http://www.bigmoney.sg/?p=484

So I believe, we’ll be entering dull, sideway market in August and potentially deep retracement in September.
If we see the market action over last couple of days they’re mostly dominated by Pennies. This is rather a cautious sign that market has little room to move up.

Indices have hit the target

admin — Tue, 03 Aug 2010 06:46:19 +0000

Many indices such as S&P, SSE and STI have hit my price target.
I liquidited most position except Hi-P, StatsChipac and Goodpack.