I am only human so that means sometimes I succumb to “temptation” when it comes to trading stocks.  By that, I do not mean a sexy remisier calling me to place orders with her la.

Recently, I traded some stocks ahead of the results season in the Singapore stock exchange. The net outcome was Breakeven as I have entered the first batch of positions prematurely BEFORE the trigger breakout signals present themself and had to cut loss as the stock price retreated.  The circumstance surrounding the entry decisions was that the market has been down a few days and then regional markets rebounded in the morning, so i naturally ASSUME that the stocks i am monitoring would also follow suit.  Actually there is nothing wrong with this assumption as long as i am aware of the potential risk and prepared to cut loss if i am proven wrong……which was the case.

During the subsequent sell down of stocks in singapore stock exchange, i was more determined to wait out for the buy signals to be triggered. This time, I would be rewarded with some trading gains…..some of my recent trades were posted here:  http://mojostock.com/forums/forumdisplay.php?f=33

And when the results seasons come to an end for the singapore share market, I have closed all my positions once the results season “window” period is over. I ended this round just about breakeven after closing all positions.

As i look at the recent trades, the bad ones were the ones which i entered “in anticipation” of a breakout.

So last Friday as i did my homework, the chart for Ferrochina looked “tempting” again……but this time round, i have decided NOT to anticipate the breakout even though US and Japan stock markets had performed strongly prior to the opening of the singapore stock market.  As i mentioned last week, the breakout trigger for Ferrochina is 1.03……and this morning the highest done was 1.02.  Had I tried to anticipate the breakout and entered prematurely, it would have ended up being a bad trade as it has fallen back to 0.98….and in the process triggered the cut loss point.

This incident reminded me the importance of being disciplined and having patience to wait for the fish to come around……

rooney

Singapore stock comments

Singapore listed stock Ferrochina has been sold down heavily despite posting a positive set of financial results for 2Q08 on 14 August.  Subsequently, stock price fell from 1.29 to a low of 0.925….down a whopping 28.3% within 5 trading days.

I usually do not use fundamental analysis (FA) to trade stocks but would  prefer to combine FA with TA (technical analysis).

Some of the technical indicators that i am using such as CCI, MACD, W%, RSI are telling me to be alert to a potential rebound. I would be looking at 1.02 as a near term resistance. It has been tested twice but failed to close above this level.  To me, a close above 1.02 will indicate potential more upside since this near term resistance is taken out.

One may ask how can one knows if 1.02 can be successfully take out?

The answer is…..I will never know for sure, so I will usually take a small position when 1.03 is triggered and wait till 430pm and see if price is still above 1.02 then may add more as market moves closer to the end of the day.

With Dow Jones powering up more than 100 points tonite, there is a good chance that 1.03 may be triggered……no point guessing though I shall just sit back and wait.

happy trading

rooney

I have warned friends to be careful as the results season come to an end in Singapore. Based on what i have witnessed in the last quarter, the technical rebound came before the season starts and ENDED as the results season come to an advance stage. This time round there is no difference based on what we have seen so far.

Now that results season is over for singapore listed companies, what should we expect next for the singapore stock market?

STI - if u look at the Medium term trend, it’s is still obviously down!

exponential moving averages (EMA) - 50days EMA is well below 100 days EMA and 200EMA, so any upward rebound will continue to face selling pressure

parabolic SAR - sti is trading way below the parabolic SAR indicator, meaning that the negative sentiment is still very strong, any near term rebound is not likely to be strong enough to push this indicator into positive zone. at the current moment, sti needs to hit 2900 in order to turn parabolic SAR into positive……..which is extremely unlikely.

based on my estimates that sti needs to rise about 5.45% or 150 points in order to push parabolic SAR into positive zone, it means that it will take at least 5 or 10 more days before we may expect to see a stronger rebound.

when i pull out the charts for MANY individual stocks, i can also see that most of their parabolic SAR indicators are deep in negative zone……this give me the same impression that they will need a very strong rebound to push their respective SAR indicators into positive zone……and again, it means that their stock price expects to see a lot of selling pressure when it rebounds and it will take another 5 to 10 days at least before we can expect to see a stronger rebound.

trade with care

rooney