Thursday, September 27, 2007

STI broke new high, close at 3714

Haha, quite a number of things I mentioned all came true, quite uncanny :P

Firstly, I wondered if STI would break 3700 barrier, well it really did! I didn't expect it to reach so soon. I can only say that opinions are often wrong but the market is always right. Doesn't pay well to argue with the market. Today STI closed at all time high of 3714 (up 64.5 pts representing 1.77% increase), with a volume of 2.95 billion. That volume alone is worth mentioning because I've never seen this high volume for at least 2 months.

With hindsight, we can always say that the subprime crisis that rocked global market is just a passing event - a mere drop in the scheme of events. STI dropped to 3000 level and recovered, all within the span of 2 months. Is holding the best strategy? I would say yes. The only stocks I sold is china transcom (after they announced very bad quarterly results - i regret because i sold at a loss...i could easily sell at a profit anytime now), the rest I didn't trim. In fact, I added more of Swiber which presently, netted me a net 17.7% with just 2 lots. Take note, this only works for counters with strong fundamentals, not those which are speculative. Look at those construction stocks - some of them haven't even reached the level before the crisis happened.

More of such lessons in another time. I really learnt quite some things in this episode. I dare say my psychology and discipline is much much better than June 06 or Feb 07's correction.

Some announcement to share:

1. Straits asia signs memorandum of understanding (MOU) to purchase thermal coal mining business in kalimantan. The transaction is expected to occur prior to the end of 2007 with the financing through a combination of debt and equity. Hmm, seems like Straits asia is going to do share placement and perhaps bond to secure the capital to finance the purchase. This is good because it would serve to double their coal production and expand their resources. Coal prices is on the rise (it'll probably rise more) given that china had turned from exporter to net importer because of its huge energy needs. More details would be announced when the sale and purchase agreements is finalised and executed.

I think that's good news. This might be the news catalyst to propel straits asia to break resistance around 1.60. Unlikely though, charts didn't point to more upside.

2. CSC announced some news about the acquisition of the property at 2 tanjong penjuru crescent from L&M geotechnic had been completed today. They also announced that the rights issue had been used in the following manner: 2 million to finance the acquisition and 3 million to acquire more foundation equipment for expansion of the group's fleet and capacity. Okay lah, neutral news.

Swiber still on war path, increased another 0.060 to close at 3.340 today. 3.40 is possible resistance, break that and we'll see it going all the way to its previous intraday high at 3.52 and beyond.

Yesterday just mentioned GK goh had a lot of selldown, today we see it cheong past bollinger band to close at 1.210.

Charts start to look good for GK goh after trading sideways for like 5 weeks. The price close above ema20 and 50 days, so it should be a good sign. MacD histogram shows 4r1g buy signal too. Other indicators point towards more upside too. Need more volume to justify it, if not might just be whipsaw action.

Europe all green, and Dow currently up by 17 points. Given the protracted run up, I'll expected tmr to have some profit taking. Hopefully STI would find support at 3680 (the best would be 3700 - but that's too much to ask?) before rising for more on Monday.