Sunday, June 24, 2007

Weekly action plan - STI support level

Dow dropped 185 points on Fri. More or less, STI will be affected.

Plan for next week: Cautious buy on yongnam. Sell if trend gets broken for straits asia resource. The rest put on hold first.

I did a chart for yongnam just now and noticed a small ascending triangle that last 1 week or so. Might not be very significant but the decreasing volume whilst inside the triangle seems to suggest that it's likely to see the formation being completed. The breakout point is 0.435, preferably with high volume.

2 good points for entry into yongnam:

1. If it breaks resistance at 0.435, then anything above that price is a good pt to enter, assuming breakout is successful. Must see the volume and market depth to decide if the breakout is genuine.

2. If ascending triangle fails by breaking below the lower trendline, then 0.400/0.405 is a good point to enter. 0.405 is the horizontal support level (short term and 0.400 is the fibo retracement zone (61.8%).

See which scenario is acted out. The edge magazine gave yongnam a target price of 0.46. I think that's highly possible upon breakout above 0.435. Tmr must see where to start queuing. Probably will buy 5 lots more to test, since this is afterall a speculative stock that I will hold for intermediate to medium term. Don't be too sure.

For straits asia, I must keep a lookout. It just broke out of bearish rising wedge on the downside last Fri. Not sure if it's a whipsaw or really broke down. Given the bad market sentiment on Monday (tmr), might see more selling for straits asia. Support level upon breaking down of wedge is 1.48 (weak support), then followed by 1.41 (stronger short term support).

If 1.41 breaks, then straits asia will also go below ema20 days, quite bearish sign. Given that ema20 days is such a long moving support level for straits asia, I will sell if it goes below 1.41. Hope it won't come to that, cos my profit would have dwindled quite a lot. See how first. Maybe if 1.48 breaks with high volume, I'll sell half first, then look again at 1.41. Break 1.41, sell all out. Yah, I think that's a better decision.

Protect your profit, and live to fight another day!

Genting...I'm quite sure I did the right thing by selling on strength last Fri. With the bad market sentiment, might not see $1 for long. Will collect at sub 90 cents level and hold long this time. I entered Genting at $1 last time, too high and too dangerous without margin of safety.

Actually don't know if I should add more holdings to Swiber. Swiber have such a nice chart, forming double base. at 2.27 seems very strong. But too expensive now... so maybe not.

So, with the exception of straits asia, the rest I feel quite safe. This feeling is quite strange and new to me, because I used to be quite jittery if dow drops 1.5 to 2%. Now, I just see it as opportunities to buy certain stocks I want. Haha, I guess that's an important change in mindset already.

Did a chart on STI. STI is channel trending, so should be bouncing up and down the top and bottom trendline. It just hit the top of the trendline, so the ultimate bottom is really at the bottom trendline, around 3540. But that's a bit far for now.

I'm looking for support at 3588 thereabouts. Happens to be 61.8% fibo retracement zone too, so I should expect that level to hold well. If it doesn't, next level at 3560, which happens to be ema20 days. Unless something serious happens, I don't think we'll be breaking ema20 soon.

Summary for STI:
Support at 3588 (horizontal + 61.8% fibo retracement) - should hold for this week
Next support at 3560 (ema20 days) - better hold, if not big trouble!

Since none of my stocks are STI components, shouldn't affect me even if it drops too much for STI. Asia bourses are heading for correction anyway, with so many of them hitting record highs.

Good luck tmr! (happy shopping!)