HL Asia

Downtrend forming a horizontal base but still within the down channel. Now trading in a tight range of 20 cents. Volume is expanding and hence there might be a good chance that it will break upwards of the horizontal range as well as the downtrending line.

RSI is is moving out of the oversold region. Other indicators like MACD and Stochastic is having a bullish divergence. ADX- is losing momentum but a break below 3 might signal the trend will continue.

Inverse correlation between HYG and SPY!

There is a diverging correlation between bond and s&p500 now. Looking at this post, we can see it very clearly. Larry Williams has mentioned this as one of the trading strategy.

Why? Because once the stock gets too expensive and bond gets to cheap, people will shift their money from stock to bond. And this is usually true. We shall see something will happen in a month or less.

This has also been mentioned in investment moat.

Otto Marine

Otto marine has been going through 2 weeks of consolidation has finally make a up move yesterday. Bullish indicators bouncing off from RSI, Stochastic crossover as well as MACD histogram pointing up.

This exit from downward channel is also confirmed with high volume. Set your stop loss at 0.455 cents.

Can STI make higher high?

So someone must have make a April fool joke with a 45+ point drop on Thursday and 55+ point on Friday. So where will STI go next? My previous post is still intact. Double top formation is still possible.

For STI to move higher, it has to break the 2950 resistance convincingly. My daily chart has shown bearish divergence on several indicators. It is even more obvious on the weekly chart. And STI has reached it’s high with the majority of the STI components still lower as compared to the Jan2010 top.

Remember the maxim, keep your losses small and let your profit ride. And buy low sell high.

20100402 sti daily double top with bearish divergence

20100402 sti weekly chart double top bearish divergence

Evidence showing economy is going higher

Look at the the end of the line for every indices, it has shown that Asian market is moving higher with Shanghai and Hang Seng confluence with the market movement in STI. Not to mention, SPY.

20100403 world chart

Another good news, is the job data is improving. It seems to have reach the bottom for states.

Alert: Palm oil sets to go higher

Looking at this link, seems like palm oil will move higher this coming week. Confirmation with different time frame confluence with the same conclusion.

I use this website to get a feel of how the whole palm oil industry is performing. Industry analysis is required to see the bigger picture.

Now everyone is waiting for STI to breakout successfully. During times like this, I wouldn’t recommend breakout strategy. Better to ambush at support.

Chart: Bottom fishing play

Counters to watch out for 5-9 April. Lets hope STI will continue to push past its resistance.

20100403 sgx chart

20100403 biosensors chart

From Zaobao
这股票于08年元月21日虽然一度回升至1.10元，可是仍然摆脱不了本栏于2007年11月13日所预估股价一旦跌穿0.58元，则将有更大的跌幅。果然，股价过后于2008年7月4日跌穿此价位，接着于2008年10月16日，28日及31日三度下试0.225元，随即以三波回升。今年元月19日股价一度升试0.90元，并于当天以“一日转向”讯号进入调整。截至今年3月31日股价已下试0.69元，由于每周一杆图已呈式微，短期回扯充其量也只能填补介于0.835元至0.84元间的缺口，过后当跌穿0.575元的支撑线了。

20100403 tat hong chart

20100403 otto marine chart

Alert: UNG breakout

United States Natural Gas Fund (NYSE:UNG) is breaking out from making a move up ever since it drop from USD 64 to USD 7.35, with various indicators such as Stochastic, RSI, MFI and MACD at oversold region. MACD histogram and RSI is showing bullish divergence. ADX is showing bear is losing strength. Support is at $6.90 and major support turn resistance is at $8.50.

ung downtrend breakout

From ETFDB

March was one of the best months in recent memory for most investors. Equity markets surged on renewed consumer confidence and continued strong demand from emerging markets. The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, climbed 3% during the month, an impressive gain that was held in check by the significant bond allocation in the index.

But not all asset classes enjoyed a March to remember. Fixed income investments were relatively flat, while some broad-based commodity funds inched lower. And few funds have ever turned in a monthly performance worse than the United States Natural Gas Fund (UNG) did in March. Investors in UNG checking their accounts today will see that the fund slid by more than 20% during the month of March. And unfortunately, that big red number is no April Fool’s Day gag.
Behind The Freefall

So how did UNG lose 20% in just 23 trading days? Surprisingly, the usual suspect wasn’t to blame this time.

UNG implements a futures-based strategy to accomplish its objective of tracking changes in the price of natural gas. As such, the fund’s value is impacted by three factors: 1) changes in the spot price of natural gas, 2) the “roll yield” incurred or earned when expiring contracts are exchanged for next-month contracts, and 3) interest earned on uninvested cash. UNG became a case study in contango last year, as the second of these became the dominant factor in the fund’s returns. Natural gas prices finished 2009 about where they started, but UNG lost more than 50% of its value (see What’s Wrong With UNG?).

more…

Improve trading using different timing of chart

Using different timing of a chart can greatly improve your timing and performance for trading. Convergence of 5min, 15min, hourly chart etc can prove that the initial hypothesis is right and ripe for entry.

As a trend trader, I often ignore charts of different timing except just by looking at the daily chart. But it seems that aggregation of data filter out the important information. And to be a true trader, it just seems like daily chart is not enough.

One example for the use of different timing is bottom fishing play. One can use the daily chart to plot the entry, stop loss and exit point. And then use 5 min, 15 min and hourly chart to confirm that the volume is truly diminishing, which imply the selling volume has died down.

- The Trader -

Contrarian Investing

There’s a particular class of investor, the contrarian, which tries to go against the crowd. It has the highest reward  but also subjected to the highest risk. It is not for the ill-disciplined and weak hearted. There are a few ways which can be used with this particular style.

Using VIX to time the market sentiment. Like what the good old Warren always say, be fearful when others were hopeful and hopeful when others were fearful. Or when there’s blood all over at Wall street. Remember Mar 09 when Citi is priced at 99 cents. But where were all the buyers?

It is best to be armed with Fundamental Analysis so that the counter has high chances of rebounding after a significant downward movement. As said, the best thing to do is to buy the index component if your FA is not good. At least the trouble stock is in the index for a reason.

A Technical Analysis check that the downward trendline has be broken is a good rule to follow.