Friday, July 06, 2007

STI close up 10 pts...surprising

Just came back home...damn tired...

Surprised to see STI close positive, actually. STI close +10.3 at 3562, with volume slightly lower than yesterday, at 4.1 billion (compared to 4.5 billion). Saw a lot of big caps which are STI components cheonging...DBS, UOB among others.

We end up today with a higher low, so the downtrend is not established. Is today's low significant? Questions, but I have no answers. Sometimes I feel I'm predicting too much into the future that nobody can seriously know what will happen for sure. There are some who are saying this looks like head and shoulders formation.

Head and shoulders need the right shoulder to have a lower volume, but it doesn't look like that. So, I not too sure if it is valid. But if it is, then is neckline at 3480. If it breaks, STI will go down much more. I was already saying support at 3480 cannot be broken, so head and shoulder or not, it doesn't matter. End result is still the same.

Enough of STI.

Shanghai also one crazy horse. Yesterday down 5.25%, today up 4.6%. Probably that's what dragged STI up, who knows? I managed to find out the reason for yesterday's great shanghai sale. They are afraid of new polices that will allow investors to invest in overseas market, hence affecting their own domestic market. Come to think of it, their misfortune should be our fortune, because if they can invest in foreign equities, we stand to benefit from the influx of foreign funds.

Quite happy to see swiber moving up again. Swiber, cosco, NOL...must be favourite trader's stock. So volatile, can see 5-8% movement (both up and down) in a single session. If I'm free sitting at home, I will also put some money to trade these 3 stocks. Short also can, long also can, crazy one. Swissco, Swiber's sis company, also went up to break 52 weeks high. Heard there are some news regarding swiber, and fibrechem.

DBS put out a report that raised the target price of swiber from 2.76 to 3.48, citing revision of earnings estimate and better than expected order book. Too bad I still can't do my independent FA yet..just have to rely on them. I am reading this book from morningstar (a rather famous value investing global investment research firm on stocks, mutual funds, ETF and so on. I like the way they introduced FA to me, very very interesting. In it, they mentioned the importance of buying into a company with economic moat - the competitive advantage over their peers that prevent erosion of profits in long run. Very interesting...set me thinking. So what's the economic moat of swiber? Why is it that swiber can keep on clinching contracts in this industry and why can't competitors charge a cheaper rate to steal their clients?

I have absolutely no answer to that. But asking is the start to discovery.

I've got great interest in these stocks: fibrechem and sinotech fibre. Sinotech fibre is the sole producer of belt for PRC army. PRC is going to change the uniform of their army so sinotech would benefit greatly from this. Fibrechem...also dealing with synthetic leather business. Looks like going to be some good news coming up for fibrechem, today close positive with such high volume.

No charting for tonight. As usual, I'll post charts on sunday and write down my action plan for the coming week. This routine is serving me very well, I found that I'm much more in control of my emotions this way, because I already planned out the possible scenarios and my action if I encounter them. No irrational exuberance in buying and no panic selling. Good to build up mental fortitude :)

My portfolio losses now down to 4.6k.

Dow up 15 pts, europe mainly green.