Tuesday, June 23, 2009

Should I sell?

US mkt has been rangebound for a while, falling, but without enough volume to break the uptrend. Trend bending but not broken. Can go either way.

To KISS, I hold stocks in a uptrend as long as possible until a definite break in the trend. Buy on fundamentals, sell on chart. I look for:
1) Lower high, lower low
2) reversal patterns (double top, H&S).
3) Support and resistance
4) Short term candlestick patterns. Just started looking at these.
I don't believe in trendlines as they always get redrawn.

Pfood:
Can't see resistance/support lines. But the large vol for the 3 days circled in May will be resistance:
Stock has not performed well. No clear uptrend. Weekly chart shows large consolidation from Oct - can go either way.
Would like to sell this one as it has underperformed the rally but can't see where to. Cannot see trend at all.

Venture:
Uptrend flattening but not clearly broken. Hold.
Can the last candle (hammer) act as a short-term reversal? Need to see if confirmed.


SIA Eng:
(Daily) Uptrend slowing, no cause for me to sell yet.

(Weekly) If it clears resistance around 2.90, there is no resistance for a while.



Cambridge:

No sign of reversal *yet*.

Wheelock:
May be reversing, hard to tell.

If we zoom in, it has very barely made a lower high and lower low.
I can choose to keep holding until a more descisive breakdown, or sell half.

Boustead:
Cant see anything. No Support, no resistance, no higher highs and lows, nothing.
No reversal sign. Gone down recently - 50% retraction of the sharp run-up from May around 60c, so its still considered normal.
Hold. The chart is so hard to read I will probably only sell this when the whole market changes.

RMG:
Cant read this chart either. Not in a downtrend, so hold.

Yanlord:
Zoom in and it may barely be forming a lower high, lower low. Not definate. Zoom out and its still in an uptrend.

Midas:
Still in uptrend in the past few days, defying the market. Announced big contract on 22nd Jun.

Sunday, June 21, 2009

Sold Tat Hong

8 lots, cut loss @ 98c, Fri 19/Jun. Loss of $1450 incl brokerage.

In hindsight, it was a mistake to buy this counter, SIA Eng and SGX without a clear entry point.

May be able to do that at the start of a rally, but not after such a powerful multi-month rally.

Saturday, June 13, 2009

Book: Predict Market Swings with Technical analysis

by Micheal McDonald (2002).

Worth reading, probably only worth buying unless you are interested in trend following and timing the market indices.
  • Believes in market timing. focus on the book is predictive the market as a whole
  • Gives his mental model of the market: long term based on fundamentals, short term series of unpredictable feedback loops.
  • From his study, these 'emotion driven' feedback loops can cause price movements of up to 25% or more, for no pressing economic reason. Maximum of 13 weeks max in a decline, 26 weeks (6 months) for an advance, possibly followed by 3 months stabilization.
  • Based on these time periods, he uses 132day and 72 day MAs for market timing with good results. Then tries to combine them: takes the average of these 2 MAs, (i.e.: buy when market breaks above this average, sell when it breaks below it). Interesting idea if you want to try trend following.
  • Gives some simple scientific reasons/analogies showing why the market is sometimes predictable and sometimes unpredictable. (e.g.: card counting in a blackjack game).
  • Believes Elliot Wave theory works only sometimes when the market is predictable. Actually, I think this is true of all Fundamental/Technical analysis.

The current rally, from mid-Mar, is now 3 months old....
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