Skip to main content

SGX Analysis



From the chart, we can tell SGX is still very strongly in its long term down trend. The 50 day moving average has just crossed below the 200-day moving average and trendline indicates SGX is still going to go down and is currently still experiencing heavy selling pressure.

There was a significant breakdown from its support line 3 days on 22nd Feb with higher than average volume at 8.80++ region and it fell to today's low at around the $8.50 region.

RSI is currently in the oversold region but this is not a signal to buy. Oversold indicator's are never a good reason to buy any stock. One good example is on the 14th Jan where the stock entered the oversold region. It was at $11. 6 days later, SGX hit a low of $8.10 and it is still in the oversold region. So if u are lucky and bought at $8.10, kudos to u. If u bought anywhere from $11 to $9, Amen....Even if you held on to the stock, the bad market sentiment and huge drops may have prompted you to cut loss early and give up on the later gains in this stock.

So how do we use oversold indicators to get into the stock? Technical analysis indicators are seldom useful on their own and RSI is no exception. Typically u can use RSI coupled with a short-term trendline break upwards to get into a low risk/high reward trade.

I have always recommended SGX based on its prior performances of rallying together with the market but now....I think its time for us to sit on the sidelines and observe when SGX will hit a support region.

Comments

Post a Comment

Popular posts from this blog

The Week Ahead of 17th March!

Lets look at the STI and HSI weekly charts so far..... STI is still firmly in a downtrend. Any rebound from here is going to be capped at the 3000 level and a break downtrends will indicate a midterm target 2600 as the next level of support. Volume is thinning out compared to last quarter of 2007 pointing to signs of bottoming out but prices are still dropping so there's no reason to get aggressively long yet. The last bear market lasted for 2 years from 2000 to 2002 and we are currently only 1/2 year inside this bear. No one will know when this bear market will end but bull markets traditionally last for 2-3 years. Lots of speculators have lost tons of money saying " this is tooooooo cheap". To put things into perspective, the typical bull market lasts for average of 3 years. Lets say u picked the exact bottom. That would just mean u are 2-3 weeks ahead of those u invest their money when all the signs are clear. Would that make us a lot richer to pick the exact bottom? i...
1 comment
Read more

Cosco Corp

Cosco Corp is still in its long term downtrend but it has already broken out of a short term downtrend which started since Jan this year and retraced back to its breakout point. Currently it rests upon the support line and any bullish market movements will likely take this counter to test the $4.60 region. The chart looks similar to SGX but Cosco is still at the support of the short term support line and if market can turn bullish, ie STI crosses 3120, this counter can easily run up to $4.60 and test its long term trendline resistance from here. Update : I cut out of this counter....Market turning down. Normally All consolidations always breakout in the direction of market trends. Now market is turning down...Cosco has no chance!!!
Post a Comment
Read more

What is a BEST trade?

This is from this book I am currently reading " Market Wizards: Interviews With Top Traders " U can find this book here . It talks about what's the component for a best trade. 1) Fundamentals 2) Technicals 3) Market Tone. All this 3 must be present. Firstly, the fundamentals should suggest there is a imbalance between supply and demand, which could result in a major move. Secondly, technicals which is the chart must suggest that the market is moving in the direction the fundamentals are suggesting. Thirdly, when news comes out, the market must react in a way that reflects the right psychological tone. For example a bull market should shrug off bad news and react vigorously to good news. Lets look at the above 3 conditions and examine our current market situation. 1) Fundamentals suggest that world economy are not going to be as doing as well as past 2 years for sure. Tightening of credit conditions means that less money is going to be following around. Much less flowing i...
Post a Comment
Read more