For the last trading day of this quarter, the day has been volatile with significant swings observed. Our market transited between negative and positive territories twice within the day (whereby the total magnitude was as much as 30 over points), before window-dressing effect took the lead and pulled us into the green. The close was 26 points higher at 1,699. This is significantly off the day high of 1,712 as there were probably many traders trying to unload their stuck positions. At pre-close matching, several STI stocks got matched down too.
Given the nature of this volatile day, volume traded was naturally high at 1.32 billion shares worth $1.24 billion.
The US futures are pointing to a positive opening for the US tonight. And perhaps, they might enjoy some sort of a technical rebound or window-dressing tonight as well. But I believe in any case, the correction is not over for most markets yet. There are likely to have many contra players who have yet to unwind their positions. We will probably see more downwards pressure on our market soon.
The strategic levels for us to accumulate remain at 1,664 and 1,600.
Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.
It is quite encouraging to see some normality in the markets today. All the markets in this region underwent a strong correction today after a US task force rejected turnaround plans for automakers GM and Chrysler.
STI skidded 72 points to close at 1,673. The day low was reached at 1,658, covering the gap at 1,664. Volume done was lower than last Friday at 1.06 billion shares worth $881.50 million.
Judging from the volume of this sell-down, I think there are many traders trapped in the market after they got desperate and chased the stocks last week. Over the next few days, they will be forced to sell off, especially those contra players. Their actions will likely push the market down. The next strategic level for us to collect more is when STI is at 1,600. From there on, if STI does drop lower, it should be perceived to be a good opportunity for us to buy even more.
Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.
Finally, the market behaved more rationally today. Stocks eased down – especially the banking counters. STI retreated 13 points to close at 1,745. Volume traded in terms of value has come down considerably compared to yesterday. The turnover is 1.70 billion shares worth $1.08 billion. One thing worth noting is: Chartered and its rights both took up one third of the entire trading volume today.
There was no window-dressing effect today. It probably happened yesterday.
Though profit-takings were evident today, the underlying strength in the broad market could still be felt. I suspect this was caused by those investors rushing to jump into the market once they spot some price weakness. I also observed that some institutions were offloading their holdings already. If we disregard Chartered and its rights today, then the volume traded would be quite indecent actually.
Chart wise, STI certainly looks like it is due for some correction soon. Ideally, we should start collecting at 1,664 and more at 1,600.
On Chartered rights:
If you happened to be allocated the rights, I suggest that you sell them off in the market for some cash now since they have been showing some strength on the back of the mother share rebounding. The traders seem to be pushing up the mother share just like what happened to CapitaMall Trust (CMT) and its rights recently. Chartered has been a loss-making company for God-knows-how-many-years. Frankly speaking, I don’t think there is any good bargain here by throwing in another $0.07 per share to subscribe to the rights. If this is really a can-do company, the rights issue would not be done at such a steep discount.
The rights will be trading till 31/03/2009. Though there might be a chance that the traders will continue to push up both the mother share and the rights as we get nearer to Tuesday. However, do not be too hopeful that you can get to sell them any much higher. Just be glad that you can finally get back some cash, after holding such a poor performing counter for so many years.
Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.
Have been absent for a long while due to numerous factors. Now, Let me start posting updates on the market and see how I can improve from here on.
Despite a muted gain in the US market, we ran up on regional strength, as well as on the possibility that there will be some more perks from the US tonight. Our broad market run-up was the best in the region in terms of percentage points. Unbelievably, STI surged up another 67 points to close near day high at 1,758. Volume done was impressively high again at 1.56 billion shares worth $1.41 billion. Though it has been confirmed by many analysts that the market has bottomed, the strength of the market is irrational. It is really hard to believe that the stocks could get pushed up so high so quickly, all thanks to the institutions. They have been buying from us all this while. Ironically, just 2 weeks ago, people were dying to get out of their stuck positions. Now, to our frustration, the prices kept going up once we cashed out, to the extent I no longer dare to advice people to sell anymore for fear of the market going up further. Then there are investors feeling so desperate to jump into the market right away rather then to risk watching all the boats leave one by one. What an extreme change in psychology right? I guess this is the power and evil of the institutions at work. Of course I may be wrong entirely, but right now, the alarms are flashing brighter and brighter as the market climbs higher within such a short time span. The market should be due for a correction soon. Let's be more careful here and not get sucked in by the temptation. This is simply a trader's market now. If you are not able to play hit-and-run, then stay out first and wait for some pullbacks.
As I have reckoned that people are playing up the markets due several important events these 2 days: For tonight, there will be the release of the final GDP, weekly jobless claims, Geithner to unveil plan for overhauling the financial system, and several representatives form the Fed will be speaking. On Friday night, there will be the consumer confidence report while President Obama will be meeting bankers.
Therefore, there might be some play ups in the market as there is also the possibility of some month-end window dressing effect this week. From next week onwards, markets should start retreating back down. Then it will be our turn to enter again to find some good buys.
Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.
After all these sharing, if you are still determined to step into the complex stock market, then I welcome you into my world.
The doorway to the world of stock market is of course your trading account. Set up one if you have not opened a trading account. There are many brokerages in Singapore, offering different types of trading accounts – broker-assisted, online, margin, contracts for difference (CFDs), and extended settlement (ES) contracts etc. Each trading account has different features, to suit the needs of different investors. The most ordinary trading accounts are the broker-assisted and online trading accounts. Some people prefer to have personalized advice from a dealer, while others prefer to pay less commission through online trading accounts. Shop around to find one that fits your preferences.
You can find out more by reading this, “Handbook for Stock Investors: A Guide to Successful Investing”, by Goh Kheng Chuan. This book also introduces the basics to fundamental and technical analysis.
Ok, now that we are all set up, we will start taking our baby steps into the practical world of stocks investing. I will start posting bits of my daily emails to my clients to keep you all updated of the market ongoing. But please don’t forget all the theories shared earlier because they will keep you on the ground. And as we go along, you will start seeing me use technical analysis terms that may sound foreign to you. Don’t worry. The terms I will be using are fairly basic in technical analysis (because I find that they work fine for me currently), and I will also introduce some charting books for extra reading. Once I have become more adept in the application of the more advance techniques, I will share with you guys.
Alright, stay tuned.
Note: Kindly read my first post About Myself, on my disclaimer. Thank you.
