My Blog Has Moved to http://mystocksinvesting.com

Dear Readers,
Thank you for your continuous support on my blog. In order to have a more secured blogging environment, I have moved my blog to http://mystocksinvesting.com/ using a self host paid server on Jan 1st, 2010. I will post all my new posts in the new site from Jan 1st, 2010 onwards.

I have also included videos to explain those technical terms I use in the chart analysis. You can find the following education topics in my new site:
(1) Candlesticks Pattern
(2) Chart Pattern
(3) Technical Indicators



Lastly, I wish everyone a Happy 2010 New Year!

With Best Wishes,
Marubozu

P/S: I will keep this Google Blogspot site for a while before shutting down.

Yangzijiang - Moving Sideway?

Found an interesting chart pattern on Yangzijiang. Yangzijing took a breather to move sideway after every upside with reduction in trading volume.
The 1st consolidation (Jun to mid July) lasted for 1.5 months.
The 2nd consolidation (Aug to mid Nov) lasted for 3.5 months.
The 3rd consolidation (Dec to ??) - how long with it last?

Things to watch out:

• $1.118 is the key support (61.8% Retracement Level for short term - red, 50D MA and the uptrend support - green line). If this support is broken, the trend will be reversed and Yangzijiang may go down to $0.906 (long term 61.8% Fibonacci Retracement Level - black) for healthy correction. Yangzijiang is still on a long term uptrend as 200D MA line is still moving up.

Jaya Holding - Successful Breakout!

Jaya Holding has finally broke out successfully and hit the target price of $0.58.
http://mystocksinvesting.blogspot.com/2009/12/jaya-holding-is-this-time-real.html
The next resistance is seen at $0.60.
The immediate support is around $0.57 and $0.58.

Courage Marine - Still Directionless

Courage Marine is still in the consolidation phase due to lack of trading volume. The stock price is currently trading within a tight support ($0.185) and resistance ($0.19 which is a 200D MA) range.

Things to watch out:

• The moving direction of 20D MA will determine whether the trend is moving down or moving up.
• The presence of the trading volume if the stock price breaks the support or resistance.
• Without the above two indication, Courage Marine probably will move sideway for a while.

Cosco - Breaking Out from a Falling Wedge?

Can this breakout successful from a Falling Wedge? Target Price for successful breakout is $1.30.

Things to watch out:

• 20D Crosses 50D MA to show the bullish strength.
• Return of the trading volume.
• The next higher high has to be more than $1.15 (61.8% Fibonacci Retracement Level) to show an uptrend. A higher low has been formed ($1.05 with reference to $1.00).

U.S. lifts $400 billion cap for Fannie, Freddie - CNBC

U.S. lifts $400 billion cap for Fannie, Freddie - CNBC

FRE 

Immediate Support: $1.036

Immediate Resistance: $1.297

FNM

Immediate Support:  $0.917

Immediate Resistance:  $1.132

 Things to watch out:

• 20D MA crosses up 50D MA - A bullish sign.
• Whether FRE & FNM can stay above the 200D MA
• Whether FRE & FNM can show a higher high & higher low uptrend pattern.

Keppel Corp - Forming A Rising Wedge

Keppel Corp is having a Rising Wedge in an up trend. This is a trend reversal pattern if KepCorp breakouts and moves down. The stock is currently trading just below 20D and 50D MA.

Noble - On A Uptrend Channel

Noble is still moving up in an uptrend channel. Resistance seens at $3.23. Noble has been on the uptrend since April without a major healthy correction. OCBC Investment Research has a BUY rating for Noble with a fair value price of $3.73 (base on 14.1 PE ratio of FY2010F).

Wilmar - Waiting For The Breakout

Wilmar is forming a Symmetrical Triangle and looks like going to breakout soon. If Wilmar breakout and move up, target price is $7.40. If Wilmar breakout and move down, the stock may move to $5.30. OCBC Investment Research has a BUY rating for Wilmar with a fair price of $8.23 (base on FY10F 20x EPS)

Citigroup - Has Down Trend Started?

Citigroup (C) said last Wednesday that it was on the verge of raising $17 billion (at a price of $3.15 per share) from investors toward repaying its federal aid. That discount was much larger than expected, leading the Treasury Department to postpone its plans to start selling the government's 34% stake in Citigroup. Treasury had expected to reap a substantial profit on the shares, which it acquired at $3.25, but selling now would instead result in a loss of hundreds of millions of dollars.

Citigroup's chart appears to be on the down trend. The stock price is currently below 20D, 50D and 200D MA. If Citigroup breaks below $3.16 (50% Fibonacci Retracement Level), the next support is $2.655. I am planning to invest in this speculative stock and waiting for the right price to enter.

Olam - Breaking Down From A Rising Wedge?

Olam appears breaking out (down) from a rising wedge. This rising wedge in an uptrend is a trend reversal pattern. If this $2.60 support turn to resistance, a breakout (down) is considered successful and the down trend will start. Next critical support is $2.50, if this support is broken, a double top is formed and this is a further confirmation of down trend. The stock price may go down to $2.085. Also take note that Olam has broken down 20D and 50D MA. All these patterns are bearish signals.

Epure - Reached The Target!

Epure close last Friday at $0.735 with a bullish opening marubozu candle. Epure has climbed too fast to reach the price target after breaking out from a Bullish Symmetrical Triangle and I have no chance to enter the trade. Anyway, I am not going to chase this stock and will probably wait for next opportunity.

Last analysis:

http://mystocksinvesting.blogspot.com/search/label/Epure%20International

SGX - In A Bearish Descending Triangle

SGX stock price is gyating in a Descending Triangle. Normally this chart pattern (Descending Triangle in an up trend) is bearish and will reverse the trend. If SGX breaks down the Descending Triangle support line, the stock price may go down to $6.90 to $7.00 range.

UNG - Going To Reverse The Trend!

UNG is showing signs of reversing a down trend to up trend. Technically & fundamentally (economy perspective) this Natural Gas ETF is due for a long term up trend. I summarise my Technical Analysis and Fundamental Analysis as below:

Fundamental Analysis (Economic Perspective)

• Economy has started to recover. The demand of natural gas will increase due to increasing economy activities like manufacturing, transportation likes car and truck, cold winter, etc.
• Natural gas is another sort of popular green energy to be used widely in future where the world is determine to cut emissions of greenhouse gases.
• Natural gas will be part of the energy substitution to petrol for all the car users.
• Due to the low economy activities during the recession, natural gas is over supply and thus, there is no more natural gas storage space left. The major gas producers are now being forced to cut production; a move which may actually be beneficial to the industry as a whole as it will likely help boost prices, thus restoring margins for many producers.

Technical Analysis (Base on Chart Patterns)

• A double bottom (or inverted head and shoulders) has been formed.
• UNG broke out from the falling wedge resistance with increase in trading volume.

Things to look out for

• The falling wedge resistance turns support, i.e. the stock price does not return to the falling wedge.
• UNG breaks the $12.25 resistance (61.8% Fibonacci Retracement Level). This level is also probably the 200D MA if I extrapolate the 200D MA line.
• The next lower low does not happen below $8.50 (historial low!)
• 20D crosses over 50D MA.

Citigroup - Testing Critical Support

Citigroup is currently testing its critical support at about $3.667. This is the support of a falling wedge and also the 61.8% Fibonacci Retracement Level, AND the 200D MA support level. If Citigroup breakdown this significant support level, the stock may start the down trend.

Raffles Education is Falling Down, Faling Down, Falling Down!

Raffles Education continues to fall in the down trend and forming falling wedge.  The stock price is currently below 20D, 50D and 200D MA and the chart is very bearish.

Things to watch out for trend reversal (ie. stock price to move up)

• The stock price breaks the falling wedge resistance with healthy volume.
• The stock price stay above the falling wedge resistance turned support line.
• The stock price cross 20D MA.

Jaya Holding - Is This Time Real?

Jaya Holding closed today at $0.495 with a opening marubozu candle with a spike in volume and breaks out from a Symmetrical Triangle. However, it remain to be seen whether this is a successful breakout due to the past 3 attempts. One thing to note that the spike in volume in diminishing compares to the previos one, and this is not a sign for a bullish & sustainable breakout. The past three spikes in the stock price were not sustainable due to lack of volume for the next few days. If this breakout is successful, the price target is $0.58.

StarHub - Forming a Rising Wedge

Starhub is forming a rising wedge. $2.07 is an important resistance. If StarHub breakout this rising wedge with healthy volume, the target price is $2.17. If this stock fails the breakout, the stock price will fall back and gyrate within the rising wedge until the next breakout.

Property Counters - Unlikely to see rally in the short term

A quick scan at some Singapore property counters like City Development, Capitaland, Keppel Land and Allgreen, the charts tell that unlikely there will be rally in the near term in addition to the thin trading volume. 

City Development is entering into consolidation phase with reduction in the trading volume.  The chart is currently showing Price Volume Divergence indicates that up trend is not sustainable if the volume does not return. It is important to see whether $10.40 can turn from resistance to support line with healthy volume.

Capitaland is showing the similar Price Volume Divergence and the stock price is gyrating around $4.10. It is important to see whether this stock is able to turn this $4.10 resistance level to support level with healthy volume. Otherwise, the uptrend is not sustainable.

Keppel Land is also showing the similar Price Volume Divergence. The stock price will probably gyrate around $3.20 for a while after breaking up from $2.81 resistance level recently.

Allgreen has been moving in a sideway for two months with thin volume at about $1.15. The stock needs some catalist before the stock price moves again. There is no clear direction where the stock price will move in the near future.

China Zaino - Finally 5th Wave Started!

China Zaino broke out from the channel and started the Elliot 5th Wave finally. The long term uptrend is still intact as the stock still shows "higher high, lower high" type of pattern. Note that Wave 1 and Wave 3 took 2-3 months to achieve the high, this Wave 5 will probably take a similar 2-3 months to achieve new high.

China HongXing - Breaking Out From A Down Trend Channel

China HongXing looks like Breaking Out From A Down Trend Channel with an increase in a trading volume for the past two days. The stock price broke the 20D and 50D MA resistance, and MACD starts turning bullish. Immediate support between $0.18 to $0.19, next resistance at $0.215.

SinoTechFibre - Breaking Out From Falling Wedge?

SinoTechFibre appears to Breaking Out From a Falling Wedge. However, it remains to be seen whether the breakout is successful due to low trading volume. Price target is $0.19 if the breakout is successful. Next resistance at $0.17. Immediate support at $0.145.

Apple (AAPL) - 10th Candle Reversal!

AAPL appeared to have a Tenth Candle Reversal base on the monthly chart. This pattern is bearish and AAPL will probably start retracing to $160 level (61.8% Fibonacci Level).

Weekly chart showed APPL has broken 4 Weeks (1 month) MA & at 12 Weeks (3 months) MA.

Daily chart showed APPL broke 20D & 50D MA support line and currently at the lower band of Bollinger Band. The daily, weekly and monthly charts show the deep correction has started for AAPL.

Review of Key Indices Patterns

DOW JONES INDUSTRIAL

• DJI is at the top of channel resistance. If the index cannot break this channel resistance (about 10,500), it may retrace back to 10,100 level (close to channel support) in the coming one to two weeks.

S&P500 (SPY)

• S&P500 has a similar uptrend channel pattern as DJI. If the index cannot break this channel resistance (about 112), it may retrace back to 107 (close to channel support) level in the coming one to two weeks.

NASDAQ COMPOSITE

• NASDAQ is hitting a critical resistance at 2191 level. It is important to see whether NASDAQ can break this resistance and continue its uptrend. 

Straits Time Index (STI)

• STI broke the previous resistance of 2,734 and continue its uptrend in a channel. 2,800 is a key resistance level and STI may retrace back to 2,670 (channel support) if STI is unable to stay above this resistance level.

Intel (INTC) - Breaking out from Symmetrical Triangle and Bullish!

Intel (INTC) is breaking out from a Symmetrical Triangle with increase in trading volume. This breakout is a bullish signal and also confirmed by the Technical Indicators. Price target is around $22.50.

Technical Indicators

• Stock price above 20D, 50D and 200D MA.
• MACD crossover and move into bullish convergence region.
• RSI is going up.
• Stochastic is going up.
• Stock price is above Parabolic SAR line.
• Stock price is at above Bollinger Band.

GS - Bullish Abandoned Baby Pattern Failure?

GS formed a Bullish Abandoned Baby (another name is Morning Doji Star) pattern a few days ago but the trend did not reverse to up trend. The trend will normally continue if there is a pattern failure, and the H&S formation remains valid for the time being.  I am watching closely whether GS will break the neckline and the support of $158.4. If these two supports are broken, GS will start a deep correction to about $138 level.

Wells Fargo & Co (WFC) - Head & Shoulders Formed!

Wells Fargo & Co (WFC) has formed a Head & Shoulders. If the stock breaks down the neckline of $26.50 with high volume, the stock may fall towards $22.37 level.
Technical Indicators like MACD, RSI, Stochastic, Parabolic SAR & Bollinger Band confirmed the bearish trend. WFC is also below 20D and 50D MA.

Epure - Breaking out from a Bullish Symmetrical Triangle!

Epure breaks out from a Bullish Symmetrical Triangle with heaving trading volume today (17 Million shares traded). The stock may return to test $0.60 support (Symmetrical Triangle's resistance turned support line) and the price target is $0.70 if Epure stays above $0.60.

Yanlord - Breaking Out from a Wedge!

Yanlord is going to breakout from a falling wedge. Past two trading sessions ended with two Bullish Marubozu candles with increased in volume.

• Current stock price ($2.41) has broken 20D and 50D MA resistance line.
• MACD has crossovered the signal line and moving into bullish convergence region.
• RSI and Stochastic are heading upward.
• Stock price is at the upper Bollinger Band and above Parabolic SAR line.

Price target remains the same as previous analysis of about $2.85 after breakout. Yanlord has to stay above $2.40 (a critical resistance turned support level of the falling wedge) before reaching the target. Otherwise, the stock will fall back and gyrate in this falling wedge.

General Electric (GE) - Another Nice Elliot Wave!

GE seems to have started the Wave 5. The stock would probably move up to $19.63 (161.8% Fibonacci Retracement Leve). Price between $15 to $16 is a good entry level because $14.68 should be a very strong support for a higher high, higher low type of up trend Elliot Wave.

Where and how did I learn my investing knowledge from?

I received some emails asking me recently where I learned my investing knowledge from. I tried to summarize my learning steps as simple as possible for easy reference.

I started investing as a newbie six months ago. I had no idea where to start and how to start initially. Basically my learning of investing knowledge divided to 3 stages:

(1) Reading Books
(2) Attending Investing Courses
(3) Put what I have learned from the books and course into practice.

There are a few books to help me get started. These books are easy to read to give me an overall idea what is stock investing is about and what other knowledge I need to acquire before start investing or trading. I suggest reading these books in sequence so that you will not get lost and get confused.

Reading Books

1. Handbook for Stock Investors by Goh Kheng Chuan. This book is for newbie who has totally NO idea on what is stock investing about. It covers very basic information like:

a. What is stock market?
b. What is a broker? How to open a trading account? Who are the brokers and where to find them?
c. What is a contract statement & confirmation note?
d. How and where to pay for the shares?
e. How to use Central Provident Fund (CPF) for investment? How to apply for CPF Investment Account?
f. What are the Terms and Procedures for placing an order? When is the Trading hour?
g. What are the factors affecting stock price?
h. What is Technical Analysis? Introduction of Basic Technical Indicators.
i. Introduction of Basic Patterns of a chart.
j. Basic information of picking a right stock.
k. What is Blue chip stock and penny stock?
l. Basic financial information of a stock like PE Ratio (Price Per Earning Ratio), EPS (Earning Per Share), Dividend Yield, ROE (Return on Equity), etc.
m. How to read an Annual Report of a company. Brief Introduction of financial statement like Balance Sheet (B/S), Profit & Loss Statement (P&L) and Cash Flow Statement.
n. How to derive the important ratio like P/B Ratio (Price to Book ratio), Current Ratio, etc. from the Financial Statement.
o. What is New Shares Issues? What is IPO (Initial Public Offerring)? How to subscribe for these shares?
p. How to use the internet for your investment?


2. Profit from the Panic by Adam Khoo, Conrad Alvin Lim & Ryan Huang. This book is suitable for beginner and intermediate investors, specially written how to make profit from stocks market during this recession. It is quite easy to read and understand. The book covers:

a. How did the financial collapse all begin? Who are the victims of this crisis?
b. Understanding on how the stock market works.
c. Looking back the past 50 years of stock market history and derive some conclusion.
d. How to buy the markets & sectors during this crisis? How and where to identify those markets and sectors?
e. How to find great under value stocks amidst the chaos?
f. How to find market bottoms and tops using the chart patterns?
g. How market operating in a cycle?
h. Introduction of critical economic data (e.g. Interest Rate, GDP, Non-Farm Payroll, CPI, ISM Index) that influence the stock market.


3. Secret of Millionaire Investors by Adam Khoo & Conrad Alvin Lim. This book is a good reference book for stocks investors as it covers all necessary knowledge & investing strategies on how to make profit from the stock market. More importantly, it is quite easy to read and understand.

a. What are the risks involved of investing in the stock market?
b. Which investment vehicle gives the highest return?
c. The idiot-proof way of making money.
d. Introduction of various ETF (Exchange Traded Fund).
e. What is Value Investing? Step by step guide on how to select a good company with wide economy moat, evaluate a company (business prospect and financial prospect), how to do research of a company, etc.
f. How to calculate Intrinsic Value (IV) of a company? How to value a company using different models like DCF (Discounted Cash Flow) model, PE ratio, PEG ratio, etc.
g. When to buy and when to sell?
h. Introduction of Candlesticks and Technical Indicators for Momentum Investing.
i. Introduction of Options. Using options to reduce risk and boost return.


4. Handbook on Forex Trading by Nicholas Tan. I use this book to understand more on the candlestick pattern and technical analysis. Topic covers:
 a. Introduction of FX (Foreign Exchange).
b. Understanding FX basics.
c. Candlesticks Introduction (Reversal Pattern like Morning Star, Evening Star, Bullish Engulfing, etc)
d. Chart Patterns (Head & Shoulders, Double Top, Flag & Pennant, Triangle, etc)
e. Using Technical Indicators in FX trading.
f. Putting all together (combining patterns and indictors) to increase the success rate of trading.


Attending Investing Courses

I was not able to understand 100% what have been written in the book and thus made me decided to sign up a course to make my learning more effective and efficient. Everything written in the book remain as information and does not really necessary useful until we apply it. Knowledge without proper application is a waste. It is a disaster if we apply the knowledge wrongly. There are lots more minor things that I pick up from the course which I don’t find it in the book. Besides, attending right courses speed up my knowledge acquisition and shorten the learning curve. However, one thing to make sure is to select the course that suitable to one’s needs and investing styles. Not all courses are suitable to everyone. If you want to find out more what course I’ve attended, you can drop me an email at marubozu1688@gmail.com. I don’t intend to do any advertisement of the courses here because that is not my intention.


Putting everything into practice

After reading books and attended the courses, I found myself still not able to make good analysis and make profit from the stock market. I start to realize that Knowledge without actual application is nothing! I then decided I had to be hands on to start analyzing the stocks by reading annual report, calculating intrinsic value, drawing support resistance lines, applying Fibonacci Analysis, etc. The more stocks I analyzed, the more I started to realize how insufficient the knowledge I had to do a proper stock analysis. I went back to refer to the course notes, flipping books, reading other traders’ analysis report and asking my course mates to double check my analysis.

It is quite tough for a start but after a few rounds of practices and received some great feedbacks of my analysis in the blog, my stock analysis skills have improved drastically. I am able to do a quick scan on the companies’ financial statement to screen and shortlist good stock, do quick assessments on the companies’ financial health status, recognize some chart patterns and candlesticks pattern without referring too much from the books.

I compile some useful website for quick reference and education purposes.

Internet Resources (Free)

1. Fundamental Analysis  http://www.investopedia.com/terms/f/fundamentalanalysis.asp

2. Technical Analysis http://www.investopedia.com/terms/t/technicalanalysis.asp

3. Candlesticks  http://www.investopedia.com/terms/c/candlestick.asp

4. Financial Ratio Formula & Explanation http://www.bizwiz.ca/ratio_calculation_formulas/financial_ratios_formulas_and_explanations.html