Wednesday, September 12, 2007

STI broke above 3500 and closed above it

Yesterday Dow closed 180 pts up. The theme nowadays is whether FED will cut rate. Seriously, from what i see, the market had already assumed that the rate cut had taken place (not a bad assumption), so if the expected rate cut didn't occur, that might actually be the catalyst for a selldown for Dow.

Not that it actually matters nowadays. Seems like asian bourses had diverged away from Dow. Two factors are pulling STI - China and US. HSI will follow china and we tend to follow HSI when it opens at 10am too. Yes, STI is such a directionless headless entity.

Today, STI opens at plus 30 over pts, and closed up 11 pts (0.33%) at 3506 with a volume of 2.5 billion. A good sign because we've gone past 3400 resistance level and into 3500. Seems like 3500 is a good support level for STI for now (untested yet). Before the selldown in August, STI was trading like 3700 max, so we're actually nearing that level again. We might be able to see it go to that level and I figured that a lot depends on next week all important 18th Sept.

A number of stocks are rallying strongly. Unionmet don't know what the hell happened, went up 0.125 to close at 0.370 (almost like 50% increment). Imagine you put in $1000, by today you get $1500 :) But seriously, easy come easy go, such a strong and fast trading pattern just means that when times are bad, the selldown will also be fast and furious. Reason is that speculators are the ones that drive up the stock, so when something bad happens, they will be the first to lock in profits or to cut their losses. Add to that, it'll be the target of shortist who saw such a fast rise with no proper base to support the level. I wouldn't want to be in Unionmet when shortist attack it, can heart attack one.

Swiber kee sieow today, cheong up 0.090 (intraday high of 3.040). No news from them though. I think it's the marine/offshore/oil sector thing. As I've said yesterday, every tom dick and harry stocks also want to get into this booming sector. Good for me lah, I'm quite exposed in Swiber.

Construction also not too bad today, with CES hogging the limelight. There's a few counters that are strong in my opinion, from what I can see from its buying action. Yongnam, CES, Koh bros and Lianbeng seems pretty steady, with the price very strongly supported. Even when times are lean, the price support holds so that's good. Second tier ones I would include CSC and BBR. I might miss out others because frankly, these are the only construction counters that I had in my watchlist. CSC and BBR forever hovering around the same price, cannot go up cannot come down, so quite frustrated watching it.

Europe not too bad, mostly green. Dow is up 30 pts at the moment. Below is my sharing of the intraday chart for Dow tonight. Looks too perfect to draw a channel trending :P