Tuesday, July 24, 2007

STI broke new record, 3665

I saw from tvmobile that STI broke new records, closing 3665 with volume of 2.98 billion. I don't feel that the rally is broadbased. In fact, most of the stocks in my watchlist are down. SGX must be the only one that brings the whole of STI up, haha :) Pennies again hogged the top volume. Scary times huh?

I responded by selling off one of my stocks, CHoffshore. It ran up yesterday after breaking out of resistance and tried to break through 1.03 intra day high, but it can't and subsequently fell and close at 0.990. From the quotes, I can see strong resistance at 0.995 and 1.00 around 4pm and decided that I had a good run with this stock, it's time to take profit and let others take the risk. By selling CHoffshore, I had officially closed the most profitable trade in my investing life, amounting to a total of 46.76% (the most profitable one had not been closed...guess which one? Swiber of cos!)

Let's recall the events that led me to buy this stock.

I bought 5 lots at 0.665 on 10th May this year. The trading decision was based on Joshing's recommendation in his thread from cna forum. The reason for entry is based on bull flag theory. If upon breakout of 0.665 resistance, the possible minimum target is 0.785. I bought at 0.665 but the price didn't close above and subsequently went into consolidation for one and a half months.

Joshing cut off on that day or a few days after because it didn't breakout, but I held on. Stubbornness or just stupidity, I forgot which, haha :) On hindsight, the consolidation phase (or base building) is important to achieve the price CHoffshore is at now. The longer the consolidation phase, the tighter will be the bollinger band squeeze and the price changes after it breaks out of consolidation zone would be much more.

It finally reached target price of 0.785 on 21st June, where the target acted briefly as a resistance level. Good lessons to learn from this whole episode...hope I can recognize the circumstances of a good run-up again when I see one.

The reason for exiting the stock is not that I have no confidence on the fundamentals. I'm very confidence of the marine/offshore industry (Asl marine and labroy clinched S$100 million contracts for shipbuilding just today). If I did not lose 30k and made it back with lots of money as paper profit and not realised profit, I wouldn't have sold this. My primary concern now is not to make big bucks, but to secure the capital that I had lost first. Profit can wait. Hence, the decision to sell.

Construction stocks are still idling. With no fresh news on contracts win, the upside for them in the short run is very limited. Constructions are my next target to trim my portfolio and secure my lost capital, namely CSC. I'm holding too much stack in construction already.

Oh, chinatranscom too...once it reaches near my target price of 0.585, going to sell it off too. This one have very bad fundamentals. I bought it solely on TA and should sell it based on TA too. Today thought it will breakout, but still idling around breakout point. Shall wait...

Dow not doing too well tonight. Just now was around -100 but sort of rebounded back to -65 now. Shouldn't go back to -100 I think. Europe is all red.

(saw on tv mobile that china is going for another round of rate hikes....did i see it wrongly? didn't they just raised it by 0.27% last weekend? hmm...)