China XLX - Bullish breakout suggests medium-term upside

Key resistance breached. Having been range-bound over the last 10 months, China XLX is likely to head higher in the medium term after breaking above the top boundary resistance at $0.48 yesterday on heavy volume.

More upside in the medium term. The MACD indicator has also just risen above the centerline following its recent bullish crossover, pointing to more upside possibilities in the weeks ahead.

Possible near term consolidation. However, as the RSI is currently showing heavily overbought signals, a consolidation could happen soon – we advocate accumulation as the counter heads back towards the new support base at $0.48.

Immediate resistance at $0.56. Beyond the immediate resistance at $0.56 (minor peaks in Aug and Sep ‘08), we expect the subsequent resistance to be at $0.68 (support-turned-resistance level).

Immediate support at $0.48. Immediate support is pegged at $0.48 (key resistance-turned-support level), ahead of $0.41 (resistance-turned-support level).

Sponsored Links

Rotary - Positive breakout suggests further upside

Breakout from key resistance. Rotary could be poised for more gains in the weeks ahead after breaking above the $0.82 key support-turned-resistance level on heavy volume recently. With this level already retested and successfully held yesterday, it could provide the platform for further advances.

More upside in the medium term. The MACD indicator is still trending up along the 10-month uptrend line, pointing to more upside possibilities in the weeks ahead.

Near-term consolidation pressure. However, the RSI is currently still showing overbought signals, hence Rotary could still face nearterm consolidation to relieve this pressure.

Initial resistance at $1.04. The immediate resistance is at $1.04 (gap in Jan ’08 and peak in Feb ‘08), breaking which, the next resistance is at $1.16 (key support-turned-resistance level).

Key support at $0.82. Below the $0.82 key support, the next support is pegged at $0.74 (5-month uptrend line), ahead of $0.66 (resistance-turned-support level).

The risk of STI consolidating has increased

The risk of STI consolidating has increased because:

1) Technicals: STI 2637 was tested this week a level that we believe should cap the index’s rise in the short-term. The Hang Seng is also approaching resistance levels from 20570-21100 (HSI rose to a high of 20664 this week). We observed ‘hang-mans’ formed on the Dow’s daily chart over the past few days, which is a sign that the rally has run out of steam.

2) Valuations are now very near to historical average. According to Datastream, the Singapore market P/B is at 1.35x versus historical average of 1.39x. The MSCI Singapore is trading at 16.9x FY09 earnings, which already exceeds the historical average of 15.9x. This suggests that the stock market rally has priced in this year’s earnings from a historical average valuation. In addition, its 12-mth rolling forward PE is currently at 15.4x, which is also fast approaching the historical average of 15.9x.

3) Sentiment for property stocks, which led the market higher in the past 3 weeks, could be dampened following comments by Minister of National Development Mah Bow Tan that the Singapore government is monitoring closely speculative activities that are trickling into property market.

4) 2 major Chinese banks ICBC and CCB aim to set a ceiling on new loans, this according to a ST article. If put in place, the FY lending ceilings imply that the 2 banks have already issued about 80% of their total lending for the year, suggesting that loans for 2H will be much reduced.

Technically, we see STI consolidating to either the 2360 (23.6% downward retracement) or 2190 (38.2% downward retracement) levels in coming weeks/months. We also maintain our technical view that the consolidation is a ‘healthy’ one because once it ends; the E-wave count suggests that STI should make fresh YTD highs.

Straits Asia - double top formation

Chart for StraitsAsia=$1.89 (Double top formation, sell)

SSE Shanghai -7% - Party is overed

SSE A SHARE IDX (First sign of party over - Sganhai fell 373 points or 7%)

The Shanghai Composite has gained 82 percent this year, the world's second-best performing stock market, after slumping 65 percent in 2008. The index, which doubled in 2006 and 2007, remains 2,789.84 points below its peak of October 2007.

Stocks on the Shanghai index trade at 36.6 times earnings, the highest since January 2008 and more than twice the 17 times fetched by the MSCI Emerging Markets Index.

Ezra - take profit now

Chart for Ezra=$1.42 (Called on 9 Jul when price crossed greenline. Target reached take profit now)

Party is over - STI from +20 to -50 now

Despite the muted US closing overnight, the STI started on a positive note and headed higher still. However, when the Hang Seng kicked off the day in the red, the mood quickly changed ? the STI too started to head lower and closed midday near to its intraday low.

Volume by midday fell some 16.2% from yesterday's morning session, with the gainers trailing the losers 148 to 308. The average value per share was at S$0.82, slightly higher than S$0.67 yesterday. Performances by the sub-indices were mixed, with the FTST Technology bearing the brunt of the correction with a 2% loss.

From a technical viewpoint, the intraday MACD has just fallen into bearish territory while the RSI looks to be turning south soon, both suggesting that the index could face more downside pressure in the afternoon. A break of the 5-day intraday uptrend line could serve as a sign to further correction.

On the longer term, as long as the index can sustain itself above 2551 (centre regression line), we believe that the next upside target of 2769 (upper regression line) could be achievable.

However, in the near-term, the STI still faces notable hurdles at 2688 (late Aug 08 low), and 2700 (psychological).

Immediate support has been shifted up to 2600, while the next stronger support is at 2337 (30- and 50-day moving averages).

Allgreen - Breakout from key resistance suggest further upside

Positive breakout. Allgreen Properties is likely to reach higher after breaking out of the flag pattern and above the key support- turned-resistance level of $1.09 on heavy volume.

Upside momentum intact. With the RSI trending higher towards the overbought region and the MACD indicator signaling a strong bullish crossover recently, these seem to suggest strength in the current upside momentum.

Target price at S1.33-$1.38. Should the breakout materialize, we expect the target price at around $1.33-$1.38 (also happen to be a key support-turned-resistance level). Subsequently, we see the next resistance at $1.66 (peak in Dec ‘07).

Initial support at $1.09. Beyond the immediate support at $1.09, the subsequent supports are pegged at $0.87 (Jul ’09 low), followed by $0.63 (key resistance-turned-support level).

ChinaAniH - get ready to take profit

ChinaAniH (Cleared 0.145, get ready to take profit between 0.15-0.155)

Straits Times Index=2,576 (High Index, High Prices, High Volume.....)

By half day Singapore market volume has crossed 2bln shares. Becareful......increase your cash holding just in case....

From a technical viewpoint, the intraday MACD indicator has initiated a bearish crossover in the positive territory in the morning and the intraday RSI is now hovering near to the midway level; these suggesting that the index could likely see more downside pressure in the afternoon.

The STI gapped up at the opening and continued on higher throughout last Friday to close at its intra-week highs of 2,533.43. Week-on-week, the index rallied another 102pts or 4.2%. The index is likely to continue on its climb to new highs this week, likely to test the 2,575 and 2,634-2,643 resistance. As its RSI is now in an overbought situation, we think that this rally might be broken up by minor pullbacks along the way. The gap of 2,484-2,503 would likely be the first support for the benchmark index. The other supports are at 2,389, 2,312 and 2,288. Both its indicators remained supportivefor the bulls.

The 38.2% retracement level of 2,363 has been hit and past marginally. The index has just breached its long term resistance trend line at 2,300 (and still staying above it), which suggests that the baton is slowly changing hands from the bears to the bulls. The base building phase appears to be finished and index is likely on its way higher to retest the 50% FR levels at 2,643 in the coming months. A break back below the trend line support currently at 2,200 would suggest that the longer term downtrend has resumed.

DBS Group Holdings - Research Tactical Idea

We believe the share price will rise in absolute terms over the next 30 days. This is because of an earnings release. DBS is due to announce 2Q09/ 1H09 results on Friday, August 7. We see the prospect of DBS beating the street due to lower-than-expected loan loss provisions (driven by vast injections of liquidity into China), strong non interest income (buoyant wholesale markets in addition to the ~S$200m gain from the sale of its 2.7% stake in HDFC Bank) and some unwind of recent underperformance re peers. The stock trades on 1.1x FY09e book - a 40% discount to peers. Moreover, any CEO announcement may also remove current uncertainty.

We estimate that there is about a 70% to 80% or "very likely" probability for the scenario. Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the scenario. Different time horizons drive the contrary call. We see the stock reacting to near-term earnings results rather than the prospect of a weak and shallow global recovery.

Techically buy Meiban and Broadway

Meiban - Technical Trading Buy, TP: $0.34

The most exciting technical development that catches our eye is the nicely placed converging 15-day, 65-day and 200-day exponential moving averages (EMA). This is a tell-tale sign of a sustainable rising trend ahead and hints of a cyclical upturn for Meiban. In addition, the stock is currently trading just slightly above the 3 converging EMAs, suggesting that price has yet to ‘run away’.

We like the ‘buy signals’ from the daily MACD as well - the indicator has turned above zero and cut its 9-day EMA trigger line to the upside.

Support is at $0.245. We see the stock moving in the uptrend channel shown with a price objective of $0.34. Risk reward is very attractive. The upside potential of 8.5cts far outweighs the downside risk of only 1ct. Recommend trading buy.


Broadway - Technical Trading Buy, TP: $0.47

The 15-day, 65-day and 200-day EMAs have converged and the stock managed to stay above its 200-day EMA for the past 2 sessions. As the daily MACD signaled a ‘buy’ because it has turned above its 9-day EMA trigger line and remained above the zero level, the stock price should continue to maintain above its 200-day EMA. A sustainable rising trend is suggested on the back of a cyclical upturn.

We observed that resistance has been low, which is a positive sign – The stock’s most recent rise from $0.30 to $0.36 during the past 10 trading days occurred on an average daily traded volume of 0.5mil shares. This is much lower than the average daily traded volume of 1.1mil shares during the period from mid-May to mid-June when the stock had a similar price range. This suggested that little effort was needed for the stock to head towards its June closing high of $0.375.

Support is at $0.345. We see the stock moving in the uptrend channel shown with a price objective of $0.47. Risk reward is very attractive. The upside potential of 11cts far outweighs the downside risk of only 1.5ct. Recommend trading buy.

Biosensors uptrend resumed

Biosensors=$0.525 (Greenline crossed Yellowline, up trend resumed)

City Development - Waiting for the Red Candle

After a meteoric rise in its share price, we think CDL may be due for a pull back soon. The recent surge in price is from the low of about $8.00 and after 6 days of price surge, notice the volume is abating as people gradually lose interest in the counter. The recent high of $10.00 acts as its resistance and while there is a chance to trade beyond $10, notice how each time after it rises rapidly, there is almost always a subsequent pull back shortly.

Just hitting a resistance of $10 is inadequate to call for a short. We seek bearish formation in the charts. Traders interested to short CDL, look out for the appearance of the type of candles circled in yellow. We think a relatively strong retracement could take it down by nearly a dollar to about $9.00.

The technical analysis is invalidated if the counter continues to trade above $10.00 with strong volume and/or subsequently forms a consolidation above $10.00.

Venture bollinger band breakout

Venture=$8.17 (Bollinger Band breakout)

ARA may retest previous high

ARA=$0.59 (Trendline breakout.....may retest $0.63 previous high)

HSI not yet overbought but SSE resistance ahead

Hang Seng Index: Not yet overbought

Bullish trend was unexpected. The Hang Seng Index (HSI Index) jumped more than 1000 points for the week and performed against our forecasts. Nevertheless, with the rebound yet to hit overbought levels as measured by the 14-day RSI and with the index riding on a bullish Wave 5, we believe that the HSI could continue to build on the gains it made last week.

Immediate resistance is located at the 19,291 – 19,302 area where a series of daily highs are seen. North of that, stronger resistance is also available at the 19,854 – 19,869 region. On the other hand, initial support at the 17,896 – 18,030 range as outlined by the technical gap and the 50-day moving average would be present to cap any downside pressures. Stronger support is also seen at the 17,185 level.

Shanghai Composite Index: Resistance just ahead

Recording another string of gains. The Shanghai Composite Index (SHCOMP Index) continues to appreciate despite its overbought condition and we have thus revised our Wave Count to take into account this development. Given the steep climb and increment, we now believe that the current Wave 3 may have already reached exhaustion point when it hit a high of 3,221 last week as the move had roughly equated to the 161.8% fibonacci extension of Wave 1 at 3,231.

Risk-to-reward not favourable for going long. The risks are clearly against those who are looking to buy into the market at present levels, given that immediate resistance in the form of the upper bollinger band and the 161.8% fibonacci extension of Wave 1 is just around the corner at the 3,231 – 3,245 area. Should the index turn down, initial support is identified at the 3,076 – 3,088 region where a series of daily lows are seen. Further support is also available at the 3,011 – 3,015 area.

ChinaAniH - Bollinger band opening up

ChinaAniH=$0.13 (Bollinger band opening up.....)

Straits Times Index Trading outside bollinger band

Straits Times Index (Trading outside bollinger band...sell first talk later)

Straits Times Index: Turning point seen at the 2,424 mark

Caught unawares. The weekly 5.3% surge in the Straits Times Index (FSSTI Index) did not pan out in accordance to our playbook and took most chartists by surprise (including us) as most of them were expecting either consolidation or bearishness. Trading volume that was higher-than-usual had managed to propel the STI to 2,434, a trading high for the whole of 2009 so far.

The 2,424 mark would be critical. We have thus revised our Wave Count as our previous call for the STI to ride on a corrective Wave C did not occur. Price action in the next few trading days will be pertinent – should the STI manage sustain a close above the 2,424 level, this would mean that the current Wave 5 is not a Wave 5 failure and that further gains should be expected. The 14-day ADX that is turning up does suggest that the present (bullish) trend is strengthening.

To go long, but.... We recommend traders to engage in long positions only when the STI manages to sustain a close above the 2,424 mark for the next few days consecutively. Should that occur, the STI could then accelerate to its immediate resistance level at the 2,504 – 2,533 area where a technical gap resides – additional resistance is also available at the 2,605 level if this technical gap is filled. However, if the 2,424 level is not broken through convincingly, the STI may then correct all the way to the 2,291 – 2,294 region where the 50-day moving average resides.

Dow and S&P500 - Still some room for further gains

Dow Jones Industrial Average: Still some room for further gains

Increasing by more than 600 points since early Jul 09. Wave 4 within the Dow Jones Industrial Average (INDU Index) may have ended sooner than we thought as the index continues to rebound off its low at 8,087. With the candlesticks depicting successive higher highs and higher lows which indicate that the trend is positive, we believe that the current Wave 5 could still push the index up even further.

Trading opportunities are present. The various technical indicators are also looking bullish. The MACD chart has just produced a centreline crossover while the bollinger bands have started expanding, signifying that the bullish trend has further room to go. Short-term investors are recommended to ride on this uptrend before the Dow meets with its resistance.

Resistance is outlined at the 9,155 – 9,159 range where a series of daily highs are situated. On the other hand, immediate support is located at the 8,363 – 8,392 area where the 14 and 21-day moving averages reside. South of that, stronger support at the 8,076 – 8,093 region is available to cap any further downside pressures.

S&P 500 Index: Trading outlook is similar to that of the Dow

As with the Dow, we have also revised our Wave Count for the S&P 500 (SPX Index) and we now believe that the current Wave 5 coupled with the string of higher highs and higher lows in its candlesticks should propel the S&P higher. The expanding bollinger bands and the centreline crossover within the MACD chart are similarly signaling that the underlying trend is bullish.

Key levels to note. Resistance is seen at the 1,001 – 1,007 area where a series of daily highs are situated. Meanwhile, immediate support is identified at the 905 – 910 range where a technical gap and the 14 & 21-day moving averages converge. Stronger support is also available at the 870 – 875 region as represented by the lower bollinger band and the 200-day moving average.

GoldenAgr - time to take profit

GoldenAgr=$0.355 (Reached yellowline at $0.36)

ChinaAniH - since its brokeout flag in June

ChinaAniH=$0.125 (Since the brokeout of flag in June, it has thrown back $0.12-0.125 support)

China Zaino exceeded target, may consider to take profit

ChinaZaino=$0.23, Exceeded yellowline at $0.225, take pofit now.

City Developments - Positive breakout from key resistance could mean further upside potential

City Development could see further upside potential after breaking above both the 30-day and 50-day MA and the S$8.56 key support-turned- resistance level via the formation of a breakaway gap on heavy volume.

With the RSI indicating a bullish divergence to the price action over the last 3 weeks and the MACD exhibiting a sharp bullish crossover yesterday, they suggest that the downside momentum might have waned.

A technical correction to retest the S$8.56 resistance-turned-support level is likely but a successful retest at this support could confirm and form a base for the next leg of recovery.

However, should the 30-day MA cross under the 50-day MA, this breakout could be a false one.

But should it be confirmed, we expect the stock to test the initial resistance at S$9.75 (support-turned-resistance level and 2-year downtrend line), breaking which, the next resistance is at S$10.70 (minor peaks in Aug ‘08).

Beyond the key S$8.56 support, the next support could be found at S$7.80 (minor troughs in May and Jul ‘09).

Yangzijiang - Likely more downside risk

Yangzijiang could be poised for more correction in the days ahead following a bearish price breakout under the key $0.755 resistance-turned-support level and the 50-day MA yesterday.

With the RSI still firmly locked under a 2-month downtrend line and the MACD looking to initiate a bearish crossover of the centerline soon, they point towards further downside momentum.

However, it is likely that there could an immediate technical rebound to retest this key level; the failure to regain it would confirm that further correction is inevitable.

On the downside, we expect initial support at $0.635 (resistance-turned-support and 4-month uptrend line), below which, the next support is at $0.54 (key resistance-turned-support level).

Immediate resistance is pegged at $0.815 (minor peaks in Jun and Jul ‘09), ahead of $0.875 (2009 high).

Dry Bulk Shipping - A summer lull?

A combination of high commodity inventories, the ongoing investigations into iron ore irregularities, and the parity between domestic and imported prices of iron ore and coal may put pressure on dry bulk rates during the summer months. Despite the more bullish steel sector fundamentals for 2H09, we worry that domestic Chinese sources of iron ore and coal may supplant imports as prices increase. As a result, we maintain our UNDERWEIGHT stance on dry bulk shipping, with weaker iron ore and coal imports in 2H09 being the key potential downside catalyst. We retain our UNDERPERFORM recommendation on all the stocks in our universe, except for TTA which we upgrade from Underperform to NEUTRAL on the basis of its cheap asset valuation. Earnings and target prices have been revised higher for all stocks except for Maybulk, as we incorporate the higher BDI forecasts.

Technical Chart on STI and Dow

Very unpredictable... Straits Times Index (Strategy should be Sell first and wait for pullback)


Now that the Guppy ST-MAG (short-term moving averages group in white) has managed to cross above the LT-MAG (Long-term moving averages group in red). This has caught us by surprise. For a medium term perspective, we should stay neutral and adopt a trading stance for this summer.

Genting and Boustead - Bollinger band opening up

Boustead and Genting SP=$0.72 (Bollinger band opening up)

STI runs into overbought region

The better-than-expected results and outlook from Intel gave the local market a big boost this morning; the STI opened 0.4% up and never looked back ? the index closed nearly 1.6% higher, just a tad off its intraday high.

Overall volume jumped by a hefty 81% from the morning session yesterday, led by strong buying in tech stocks, as gainers overwhelmed losers 302 to 90. Not surprising as well, all the sub-indices were in the black, led by the FTST Tech, which climbed 3.3% higher. On the other hand, average value per share traded eased slightly to S$0.87 from S$0.95 yesterday.

But from a technical standpoint, the rally may be running out of steam soon. The intraday MACD has not only initiated a negative crossover but is also displaying signs of a negative divergence. The intraday RSI is again showing the market as overbought currently.

More importantly, we think that the index could be running into some pretty stiff headwind around 2350-2361 region (several prominent peaks in Jul); the failure to overcome this near-term resistance could provide the excuse for investors to take profit.

Having said that, the pullback may be shallow, and is limited to 2300 in the near-term, and 2270 -2282 in the short-term.

Capitaland Shorterm Bulish

Capitaland=$3.41 (Short term bulish divergent) but...... see the update below......


Capitaland=$3.49 (Take profit now at trendline resistance)

IndoAgri - consider to take profit

IndoAgri=$1.11 (Trendline resistance at $1.12... Take profit now)

Oceanus pending breakout?

Oceanus=$0.30 (bollinger band narrowed.. pending breakout)

Dow and S&P500 both bearish trend

Dow Jones Industrial Average: Trend is bearish but support is just around the corner

The Dow Jones Industrial Average (INDU Index) performed against our expectations and broke below our quoted support level at 8,213. While this also resultantly means that our forecasted 5-Wave Triangle consolidation pattern is no longer at play and that further downside should be forthcoming for the Dow as it rides on the current Wave 4, note that support which is just around the corner from present levels should serve to cap any additional downside. The bearish centreline crossover within the MACD chart is also painting a negative picture for the Dow.

Support at the 7,987 – 7,995 area is expected to be robust, as this is where the 61.8% fibonacci retracement of Wave 3 is seen. Furthermore, the 100-day moving average also resides in this region – we therefore expect this level to hold up against any further downside pressures. Resistance, on the other hand, is available at the 8,560 – 8,580 area where a series of daily highs are identified. Aggressive traders may try to buy a bounce off the support level to engage in some scalping.


S&P 500 Index: Further room to fall as compared to the Dow

More bearish than the Dow. Similar to the Dow, the 5-Wave Triangle Pattern that we have previously forecasted for the S&P 500 (SPX Index) is now invalid after price action during the previous week performed against our expectations. Note that, however, while the current Wave 4 is also expected to pull the S&P down, support to cap the potential bearishness is not available in the nearby vicinity as opposed to the Dow. The 14-day ADX that is moving upwards also signifies that the downtrend is picking up steam.

The S&P may continue to lose ground until the 847 – 851 support area where the 61.8% fibonacci retracement of Wave 3 and 100-day moving average is situated. Initial resistance, on the other hand, is seen at the 898 level where a series of daily highs are seen. Additional resistance is also available at the 927 – 931 range where another series of daily highs reside.

Hang Seng Index: Still targeting the 17,100 mark

Bearish trend was not unexpected. The Hang Seng Index (HSI Index) experienced a decrease of 2.7% for the previous week as it continued to ride on its Wave C, rather inline with our call for a bearish trend. With the bollinger bands moving downwards and with the 14-day RSI not in oversold territory, we believe that the direction of the HSI is still negative and there remains further room for correction.

Our target of 17,097 for the HSI is still intact, as this is where the 100% fibonacci extension of Wave A is located. While resistance levels are seen at the 18,234 – 18,258 and 18,777 – 18,780 regions respectively, we recommend that short-term investors adopt a sell-on-rally strategy as the current Wave C is expected to continue to drag the HSI down.

IndoAgri - Second lows... wait more

IndoAgri=$1.03 (Second lows...wait for divergent signal to buy)

STI weakness continue

Despite most US stocks closing lower on Wall Street on Friday night, the STI opened mildly higher this morning, likely inspired by the firmer Nikkei index in early morning trading. However, as the US index futures retreated sharply thereafter, the index followed suit and closed midday near its intraday low with a 1.6% loss.

Overall volume improved slightly, up about 13.5% from the morning session last Friday, even as losers overwhelmed gainers 272 to 92. On a sectoral basis, all sub-indices are in the red except for the FTST Utilities Index. The average value per share was also lower at S$0.75 as compared to S$0.90 midday last Friday.

From a technical standpoint, the formation of a spinning top candlestick Friday (signal of indecision), coupled with today's sharp retreat could suggest that the index has topped out and is likely to face further correction in the near term.

Our initial support is pegged at around 2235 (Jul '09 low), ahead of 2194 (23.6% Fibonacci retracement).

On the upside, the immediate cap is at 2319 (30-day moving average), ahead of several prominent peaks around 2350-2361 in Jul '09.

SembMar - Triple Bearish Engulfing

Regional market indices (STI, HSI and Nikkei) have been showing bearish divergences after a strong run-up. The only exception is China, but even the SSEC is beginning to show some weaknesses of late. Of particular mention is the Dow Jones which has just cut back below its 200 days simple moving average. This signal is a widely followed indicator in which mostconventional fund managers and institutions use to determine the main trend, thus basing a major part of their trading decisions on it.

In line with general market weakness, SembMar created 3 bearish engulfing patterns in the month of June, the first of which happened on the SAME day UOB KH Research called for 'showtime'. This also coincides with its price topping out at $3.16 after a 3 months rally. Ever since 'showtime' began, SembMar has been in perpetual downtime mode, creating 2 more bearish engulfers in the process.

Baring the end of 'showtime', you may try shorting SembMar at $2.60+ using your SBL account with me. Downside target is identified at $2.45 and further towards $2.23 if the former does not hold up. Resistances are at $2.72 and $2.83, hence stop-loss can be placed at either prices.

Noble Green Cut Yellow Line

Noble Grp=$1.67 (8DMA in green cut 34 DMA in yellow...Sell Target $1.34)

Dow medium term still pointing down

DJ INDU AVERAGE (Medium Term trend is still pointing down....So sell into any strength)

Golden Agri may consider to take profit

GoldenAgr=$0.32 (Near yellowline resistance, take profit)

STI short term rebound over soon?

Straits Times Index (Reached yellowline...short term rebound may be over)

Although the index managed to end midday with a 1.2% gain, the overall volume shrank nearly 33% from yesterday's morning session, with gainers just outpacing losers 182 to 144. The average value per share also slipped slightly to S$0.97 from S$1.02 yesterday, with most sub-indices in the black except for those related to real estate.

But from a technical viewpoint, the inability to convincingly hold above 2300 is a strong signal that market fatigue has set in. The intraday MACD indicator has also turned bearish (despite the relatively strong performance of the index this morning).

Should we see another failed attempt to regain the 2300 level in the afternoon, we may see the index slowly slipping back to 2357 (50-day moving average) and even 2215 (lower Bollinger Band).

GoldenAgr too much volume

Golden Agri - Fell from $0.40 to $0.295 within 7 trading days. Volume exploded to 161mln by midday. If "Volume kills trend", it should stage a technical rebound from here. Similarly, Indo Agri is also a potential technical rebound candidate.

STI - cont sell into strength

Straits Times Index=2,275 (Continue to sell into any strength.....supports at 2,100 follow by 1,950

Volume also was pretty muted and was even 7.8% lower compared to the morning session yesterday, despite gainers outpacing losers 171 to 133. Nevertheless, the average traded value per share edged up slightly to S$0.87 from S$0.71 yesterday. Most sub-indices were back in the black, except for real estate-related ones.

Again, the lower volume suggests a lack of conviction behind this morning's rebound; intraday RSI indicates that the market is currently slightly overbought, although the intraday MACD is still pretty positive. We suspect that the lack of follow-through buying in Europe later may spark profit-taking and send the STI back towards our near-term support of 2239 (50-day moving average), ahead of 2217 (lower Bollinger Band).

Dow - Guppy Chart Bearish Signal

Dow Jones Industrial Average - as you can see the ST Group of Moving Averages (White) has fallen below LT Group of Moving Averages (Red).....a clear SELL signal.

StraitsAsia broken yellowline

StraitsAsia=$1.66 (Broken yellowline at $1.69.... First target=$1.52 which is 38.2% retracement)

Genting: Stuck between S$0.67-S$0.70

Genting Singapore is likely to see more sideways trading in the near term.

The top is bounded by S$0.70 (30-day and 50-day moving average), ahead of S$0.72 (upper Bollinger Band).

The lower boundary is at S$0.67, provided by the centre of the Bollinger Band, which looks like a pretty firm support to us, as it has survived four tests over the last five sessions.

Below this, the next support is at S$0.66 (50% retracement of the rally from S$0.415 to S$0.91), ahead of S$0.63 (lower Bollinger Band) and S$0.60 (61.8% retracement of the same rally).

Suggested entry level would be between S$0.60 and S$0.63.

Though the daily MACD has recently cut up and the RSI is managed to stay above the 50% level, we note that the volume has dwindled quite substantially over the past few sessions.

This reinforces our view of more near-term sideways trading (with a slight downward bias).

NOL - trading idea

At low end of June’s $1.44-$1.62 trading movements withminimum daily finishes at $1.46-47 and daily highs of $1.55-59offering 5-8% spread.

Since the end-May breakout from $1.20 to $1.64 high in early June, NOL has been underpinned by its rights issue the trading of which ends tomorrow.

Although $1.64 ie the 38.2% fibonacci mark of its one-year chart from $3.04 high to 77c low in March has proven to be a major hurdle, the stock has stayed well above the 23.6% point at $1.30.

Today it comes closest to the middle Bollinger band ($1.46) since the end-May breakout, a sign of support coming in.

14-day RSI at 52.6 is also at level before that breakout while 7-days (at 45.3) is even more suggestive of a small technical rally taking place.

The counter has resumed trading below 13-days simple moving average (at $1.52) and the fact that it manages to spring back above this buy signal line for much of the past fortnight indicates its strength to move to $1.55-59 within intra-day trading.

In another sign that support is strong at $1.45-46 is the 30-day MA at $1.45 which has stayed well below daily price since end-May until today.

Dangerous if DJIA break below 8,250

Please take note that unlike other chartists, the 200DMA I used is a smoothen MA known as EMA. As such you may ask why my DJIA chart is below 200DMA compare to other which saw their DJIA above 200DMA.

DJIA - as you can see it is unable to cross my 200DMA line (Blue color) after many many attempts. The recent pullback has started to see another bearish signal, i.e the short term moving averages or STMA (group of lines in white) has penetrated the Long term moving averages or LTMA (group of red lines) as defined by Guppy as a Bearish signal. As you may know, once the STMA goes under the LTMA, a downtrend will be established

CDL HTrust - Stalling of rally at key resistance heralds possible near-term downside

CDL Hospitality Trust could be facing more near term downside as the price seems to have stalled at its key $0.845 resistance (also hit the upper Bollinger band) on relatively high volume. A lower close today would confirm the bearish price reversal.

And downside momentum looks set to accelerate in the near term. The RSI has already turned down just shy of the overbought region while the stochastic indicator is about to make a negative crossover inside the overbought region. The Accumulation/Distribution indicator also made a sharp bearish reversal yesterday.

We expect the stock to find initial support at $0.79 (2-month uptrend line and centre Bollinger band), breaking which, the next key support is likely at $0.72 (minor troughs in May ’09 and Jun ’09 and lower Bollinger band).

Above the $0.845 key resistance, we see $0.92 (minor peak in Oct ’08) as the next resistance.

traits Times Index - Volume continue to contract

STI - the best case for the current market is suggested by the bollingerband, i.e range trade. Hence we should continue to sell into strength buyonly on weakness.

China market - a market waiting for correction?

A shares are trading at 28 times PE and 3.2 times Price to Book Value.

STI , HSI may turn bearish soon

Straits Times Index: Further downside is impending

Inline with expectations. The Straits Times Index (FSSTI Index) hit a low of 2,211 although it eventually clawed backsome of its losses to lose 59 points in a fortnight, inching slightly below our former support level of 2,220 in the processbut performing inline with our bearish expectations – we had previously mentioned that a “correction is forthcoming” forthe index. Given that the present Wave A has yet to run its full course and with the MACD chart remaining bearish, weare of the opinion that the STI is set to lose further ground in the near-term.

The STI appears to be in the terminal stages of a sub-wave 4 of A, given that the rebound off the 2,211 level hasfulfilled the 61.8% fibonacci retracement of sub-wave 3 of A. With the impending sub-wave 5 of A expected to drag theSTI lower, we therefore recommend short-term traders with existing long positions to cash out of the market while thoselooking to accumulate should wait for lower levels.

Resistance at the 2,396 level – as depicted by a series of daily highs – is expected to hold firm. On the other hand,initial support is identified at the 2,211 – 2,218 region as outlined by the lower bollinger band. Additional support is alsoseen at the 2,094 level should the first support falter.

Shanghai Composite Index: The party continues

The rally in the Shanghai Composite Index (SHCOMP Index) was not within our expectations as we were forecastingWave A to drag the index down to lower levels. Given the ease of how the 100% fibonacci extension of Wave 1 at 2,808was broken above, however, we have revised our Wave Count and we now subscribe to the view that the present Wave5 is poised to push the index to higher ground.

Targeting the 3,077 mark. The 14-day ADX has trended up in sync with the rally in the index, signifying that the current(bullish) trend is gaining strength. Resistance is identified at the 161.8% fibonacci extension of Wave 1 at the 3,064 –3,077 area, a level that the index is targeting. Support, meanwhile, is located at the 2,841 – 2,844 range where the 14-day moving average and a series of daily lows are situated.

Hang Seng Index: Trend to turn bearish soon

Current rally may not last. With Wave A of the Hang Seng Index (HSI Index) appearing to have been completed whenit reached a low of 17,375 during last week, we have therefore labeled the ensuing rebound as a Wave B. However,with the falling 14-day ADX which signals that the present (bullish) trend is losing strength, we thus advocate a sell-onrallystrategy as we believe that the HSI could turn bearish any time soon.

Furthermore, initial resistance which is just around the corner at the 18,739 mark as represented by the 76.4%fibonacci retracement of Wave A is yet another testament that the risk-to-reward ratio is not favourable to those who arelooking to engage in long positions at current levels. Should the index start to lose ground as we have forecasted, initialsupport at the 17,912 – 18,069 area would first serve to cap any additional downside. Further support, meanwhile, isalso available at the 17,375 level.