Wednesday, October 24, 2007

Sold off straits asia resource

Today I sold off straits aisa which I had been holding since 2nd May this year.

Looking back on my post on 2nd May, I bought straits because it had a breakaway gap when UBS issued a report with a target price of 1.31. Volume surged 1.5 times the average. Based on charts, straits broke out of symmetrical triangle on the upside with indicators supporting more upside. I bought at 1.13.

Today I sold it all off at 2.45. I would like to say I sold off straits because the daily RSI shows it hovering around overbought region (historically, seems to be followed by selloff after reaching above 70%) and stochastics trending down, coupled this with what I see from the weekly stochastics (blue going to cross below red - bearish sign). But actually that would be cheating myself. I sold simply because I want to sell off something today to protect my capital. All the reasons are rationalised AFTER I decide to sell off. I just looked at the charts to assure myself that my decision is correct.

Hahaha the last sentence above is a breakthrough for me - I come to terms with my own vulnerability and the fact that I'm pretty much an emotional buyer and seller with not much skills. As grey puts it, the realisation of ignorance is the beginning of knowledge. How true that simple and elegant line is :)

Here's the chart for future reference (not the closing price today but yesterday's)

For those still in it, I believe Straits still got steam to move on. Seems like it's consolidating and building base now. For it to see more price action, we need the price to build a solid base to launch off the next run. Weekly charts look bearish. But fundamentally, straits is in a good position to leverage on the higher commodities prices (straits deals with mainly coal) and ever surging demand. But the question is: it the price justified? Has it been factored in? These are questions that I do not have answers to.

Oh, straits is a cool 115% returns for me (excludes dividend of $135 in total). Inclusive of dividend gives me a total returns of 117% over 6 mths - that's roughly 19.6% returns per month. I would say it's one of my better investment this year.

Market suddenly plunge to 3700 support, wonder what's up?