I'm back from my holidays, and it was not that bad in Hong Kong and unfortunately, without Internet access there. As for the past few days, I have seen 2 days of bullish actions from dow and the other 2 US indices, and in my opinion, if today is going to be another day of bullish run, this gap up is really scary as dow has surged about 400-500 points already! As far as I read from the news and reports, the surge was due to investors' expectation of another rate cut again! This website is quite useful for understanding the rate cut effects:
http://library.hsh.com/?row_id=88
As I mentioned before, another rate cut will probably weaken the USD again and commodities like oil, will need more USD to be paid, as well as gold etc. With the weakening of the USD, Yen will most likely appreciate against it and the winding of the Yen Carry Trade will probably make investors suffer again. Currently, Yen/USD is at 110.00-110.01 + 1.30.
STI, probably for the 1st time I have seen, has increased a whooping 108.50 (3.22%)! Probably due to dow's major rise, most of the major asian indices have taken more than a 2% increase. As for STI, most of my watchlists have only risen abit. As I mentioned before many times, during the initial bullrun, blue chips will have to rally first. Today, most of the blue chips like Singtel, SGX and probably Cosco have taken a major move forward.
Now, as for the counters I'm have been monitoring, Celestial was in a good position when it falled below $1.16. Unfortunately, I wasn't in Singapore and I can't really monitor the situation. Now currently closed at $1.21, I will see the performance from the US side to determine as more updates of their economy will be released and there's a speech from the feds as well. I have mentioned earlier on that most of the signs for Celestial (RSI, stochastics, MACD) are quite good for a buy in, the $1.16 was a good buy in and probably safe price. Since it was missed, another one I think will be good is at $1.19-$1.20 or probably $1.21 depending on the market sentiment. This time round, I won't be expecting a super surge from celestial to hit a large gap but a chance of getting about a 10 cent surge and I will probably get out. Reason being is with the Yen/USD, which I'm not comfortable with and I will lock profits whenever possible as for now.
Another interesting counter is FJBen, which has been in my watchlist for many months. It is interesting to see now, that it is giving out entitlements of $0.13 per lot, which to me is quite attractive. Its due date is on the 5th of Dec, which is coming near as well, and I'm very much tempted to try this counter but I will check out more tonight before making any commitments. A short introduction for this counter is it deals with branded stuffs as such.
22nd Nov 2007
Asian markets has closed for the day, and it seems that the 2nd day of whipsaw action arrived again! Looking at the intraday chart for STI, it seems that it was falling dramatically to near to 3300 and suddenly the rally came again! Unfortunately, it isn't like the day before, where there were rumours or whatsoever that could have rallied this market. I was reading the forums and it seems that people were buying in again, assuming that the market is going to rally yet again. However, the heavy selldown came again and this time, all the way down to 3312 (-1.03%). I do not have any software to see the intraday candle charts for STI unfortunately.
As for other news, YEN/USD is currently at 108.64-108.67 - 0.47, which is probably getting from bad to worst. However, USD is still standing relatively strong against SGD, at 1.4503 SGD per $1 USD. I will try dig out some information with regards to the strengthening of the yen dollar against USD, and if this still carries on, many institutions will suffer this yen carry trade. For more information with regards to this yen carry trade, you may refer to this wiki to understand the structure:
http://en.wikipedia.org/wiki/Yen_carry_trade
Celestial and YZJ has fallen way below its expected value, and currently celestial trading at $1.15 and YZJ at $1.890, the heavy beating may seem to last quite a few more days. The market sentiment is quite bad in fact, and STI's trading volume is considered quite low as the top volume of the day is only about 44,260 (for YZJ). I won't be surprised about tonight's news, which will probably spook more investors! As I mentioned earlier, for the market to rally back again, blue chips will be the first to move. If blue chips doesn't recover, don't pin your hopes on 2nd-tier or 3rd tier counters.
A few blue chip counters I used for a gauge is Singtel, DBS, Capitaland. I monitor Singtel more often especially, as this is like one of the strongest companies for Singapore. Just like Apple and Google in the NASDAQ, it is a key indicator to identify the feel of the markets.
Next, before any rally as well, it has to go through a consolidation phase typically. It doesn't normally do a V pattern and shoot up all the way without any consolidation, as it requires investors and traders and etc to actually cover the gap up. If the markets allow this gap up to grow, the gap down covering will be even worst and when this happens, overselling will occur again.
I won't be monitoring the shares until next Wednesday as I will be going to Hong Kong for a holiday. In any case, don't make any rash decisions in this point of time and wait for the signs to appear to increase success rate! :)
As for other news, YEN/USD is currently at 108.64-108.67 - 0.47, which is probably getting from bad to worst. However, USD is still standing relatively strong against SGD, at 1.4503 SGD per $1 USD. I will try dig out some information with regards to the strengthening of the yen dollar against USD, and if this still carries on, many institutions will suffer this yen carry trade. For more information with regards to this yen carry trade, you may refer to this wiki to understand the structure:
http://en.wikipedia.org/wiki/Yen_carry_trade
Celestial and YZJ has fallen way below its expected value, and currently celestial trading at $1.15 and YZJ at $1.890, the heavy beating may seem to last quite a few more days. The market sentiment is quite bad in fact, and STI's trading volume is considered quite low as the top volume of the day is only about 44,260 (for YZJ). I won't be surprised about tonight's news, which will probably spook more investors! As I mentioned earlier, for the market to rally back again, blue chips will be the first to move. If blue chips doesn't recover, don't pin your hopes on 2nd-tier or 3rd tier counters.
A few blue chip counters I used for a gauge is Singtel, DBS, Capitaland. I monitor Singtel more often especially, as this is like one of the strongest companies for Singapore. Just like Apple and Google in the NASDAQ, it is a key indicator to identify the feel of the markets.
Next, before any rally as well, it has to go through a consolidation phase typically. It doesn't normally do a V pattern and shoot up all the way without any consolidation, as it requires investors and traders and etc to actually cover the gap up. If the markets allow this gap up to grow, the gap down covering will be even worst and when this happens, overselling will occur again.
I won't be monitoring the shares until next Wednesday as I will be going to Hong Kong for a holiday. In any case, don't make any rash decisions in this point of time and wait for the signs to appear to increase success rate! :)
Just for laughs
Just came back from a meeting, and happened to read about this ding hai effect over the forums. If you are from any of the Asian countries, you would probably have seen the show by Adam cheng in "The greed of man". This show is basically about the Hong Kong share market, where he is a shortist that become rich overnight by shorting the market. More information can be read from the wiki:
http://en.wikipedia.org/wiki/Ding_Hai_Effect
Coincidentally, in Singapore, they are showing his show during the 10pm slot, which is "The Conqueror's Story (楚漢驕雄)". It is interesting to see how much coincidence there is between him and the stock market, as almost everytime his show is aired, the financial market always suffer. As asians are more superstitious, that is why this self fulfilling prophecy could occur. Remember this phase, a lie told often becomes the truth. When everyone believes his shows always cause this, it becomes factual instead!
Lastly, looking at the markets now, Nikkei has closed with a -373 points (-2.46%) at 14,837, and HSI with a -1,114.40 (-4.01%) at 26,656.81. It seems that the market isn't welcoming the results of the fed meeting yesterday and those who assumed that the market had recovered yesterday and bought in are suffering the backlash now. YZJ is one good example of this backlash. Next, I must always emphasize, inducements in the forums is very heavy recently and please contact your financial advisor or broker for professional advice instead of listening to those posters who tell you to buy, sell or hold XXX or YYY without any background knowledge!
Celestial is now trading at $1.160, which broked the $1.20 resistance and out of the channel too. If you refer to the chart I posted earlier with the fibonacci retracement, $1.17 was the 23.6% resistance. If it still closes below this, it could possibly move to $1.10 in my opinion. More information when I get back tonight.
http://en.wikipedia.org/wiki/Ding_Hai_Effect
Coincidentally, in Singapore, they are showing his show during the 10pm slot, which is "The Conqueror's Story (楚漢驕雄)". It is interesting to see how much coincidence there is between him and the stock market, as almost everytime his show is aired, the financial market always suffer. As asians are more superstitious, that is why this self fulfilling prophecy could occur. Remember this phase, a lie told often becomes the truth. When everyone believes his shows always cause this, it becomes factual instead!
Lastly, looking at the markets now, Nikkei has closed with a -373 points (-2.46%) at 14,837, and HSI with a -1,114.40 (-4.01%) at 26,656.81. It seems that the market isn't welcoming the results of the fed meeting yesterday and those who assumed that the market had recovered yesterday and bought in are suffering the backlash now. YZJ is one good example of this backlash. Next, I must always emphasize, inducements in the forums is very heavy recently and please contact your financial advisor or broker for professional advice instead of listening to those posters who tell you to buy, sell or hold XXX or YYY without any background knowledge!
Celestial is now trading at $1.160, which broked the $1.20 resistance and out of the channel too. If you refer to the chart I posted earlier with the fibonacci retracement, $1.17 was the 23.6% resistance. If it still closes below this, it could possibly move to $1.10 in my opinion. More information when I get back tonight.
21st Nov 2007
A late post today, as I was late for work. US markets have closed and it was definitely a whipsaw market! At 1030pm last night, US markets opened well with a high expectation from the fed meeting as well as strong earnings from HP. Here is the link for the whole article:
http://money.cnn.com/2007/11/20/news/economy/fed_outlook_analysis/index.htm?postversion=2007112016
When this news came out, down came the stocks as well. However, during the end of the day, it surged up again and you can see that it is in the positive range. Some key notes in the article are as follows:
But in a new economic outlook, the central bank also lowered its growth target for the economy in 2008, raising hopes that the Fed will cut rates again when it meets in December.
As I mentioned earlier, rate cuts will cut both ways for us, and here are some more information from the article:
Rate adjustments over the years:
Looking at the new fed outlook as well, they are anticipating a fall in GDP for next year and a rise in unemployment. As the normal relationship between unemployment and inflation is inverse, you can see that inflation is anticipated to drop to 1.8% in 2008 from 2.9% in 2007. This is their outlook for the next 2 years, and that is if everything is going what they anticipated.
Currently, YEN/USD is at 109.76-109.78 - 0.64, and USD is at its all time low against EURO while I heard the news over CNA on the bus, it seems that the dollar has started to decline yet again this week as compared to last week. Last week, I was mentioning that USD was strengthening slightly against most of the currencies and could poise a return but this week seems worst. Oil was traded at $98 per barrel, which took a +3.58% rise since last night!
Even though US is currently going into a holiday soon, Thursday being Thanksgiving and the Black friday, and if you are not sure what is the black friday, don't worry, it's not like the black monday where the markets crashed. It was called black friday due to accounting issues. As in the past, companies usually have losses declared from January to November, so in their accounts, they use the red pen to indicate this. The black friday which indicates that the buying season for the holidays will in turn generate profits for the companies and thus they will use the black pen to write their accounts.
Back to the holiday thing, I presumed that it should have low volume trading for the whole week, but it seems that the volume has been unexpectedly high for the past 2 days!
That's all for now, as I got to head back to work. :)
http://money.cnn.com/2007/11/20/news/economy/fed_outlook_analysis/index.htm?postversion=2007112016
When this news came out, down came the stocks as well. However, during the end of the day, it surged up again and you can see that it is in the positive range. Some key notes in the article are as follows:
But in a new economic outlook, the central bank also lowered its growth target for the economy in 2008, raising hopes that the Fed will cut rates again when it meets in December.
As I mentioned earlier, rate cuts will cut both ways for us, and here are some more information from the article:
Rate adjustments over the years:
Looking at the new fed outlook as well, they are anticipating a fall in GDP for next year and a rise in unemployment. As the normal relationship between unemployment and inflation is inverse, you can see that inflation is anticipated to drop to 1.8% in 2008 from 2.9% in 2007. This is their outlook for the next 2 years, and that is if everything is going what they anticipated.
Currently, YEN/USD is at 109.76-109.78 - 0.64, and USD is at its all time low against EURO while I heard the news over CNA on the bus, it seems that the dollar has started to decline yet again this week as compared to last week. Last week, I was mentioning that USD was strengthening slightly against most of the currencies and could poise a return but this week seems worst. Oil was traded at $98 per barrel, which took a +3.58% rise since last night!
Even though US is currently going into a holiday soon, Thursday being Thanksgiving and the Black friday, and if you are not sure what is the black friday, don't worry, it's not like the black monday where the markets crashed. It was called black friday due to accounting issues. As in the past, companies usually have losses declared from January to November, so in their accounts, they use the red pen to indicate this. The black friday which indicates that the buying season for the holidays will in turn generate profits for the companies and thus they will use the black pen to write their accounts.
Back to the holiday thing, I presumed that it should have low volume trading for the whole week, but it seems that the volume has been unexpectedly high for the past 2 days!
That's all for now, as I got to head back to work. :)
STI closing for 20th Nov 2007
Today, STI closed with 3,438.27 (+26.55). Unexpected as it is, as it was showing a negative breakdown this morning until this afternoon. The sudden surge from nikkei first was the turning point, which affected HSI and STI in the afternoon.
As far as I have gathered, there were 2 different theories behind this surge. One was from hong kong, where they received some news with regards to a fed meeting and speculated to have a rate cut again. This is also reported in money.CNN.com:
At 2 p.m. ET the Federal Reserve is set to release minutes from its meeting last month, which investors will read carefully for clues as to whether the central bank will continue to cut interest rates or leave them unchanged at its final meeting of the year Dec. 11.
http://money.cnn.com/2007/11/20/markets/stockswatch_ny/index.htm?postversion=2007112006
The next one was from Japan, and because of this, nikkei shot back with a +168.96 points (+1.12%). It was from investors that they felt that the counters are all oversold and the buying back resulted in the above. I read about this in the office, which I believe it was from the forums but I couldn't find the thread again. Let me dig again and see whether I can find it or not.
If you have read one of my posts previously, I mentioned about a comment made by Gareth(inthemoneystocks.com) on the patterns that formed on the charts (http://dimitric-trading.blogspot.com/2007/10/5th-oct-2007.html). With the NASDAQ chart as an example, it was an anticipation due to the technical patterns and such, the wrong signal was given as I also anticipated a fall in the STI due to the technical patterns.
With regards to the rate cut, it is important for the fed to determine the severity of the rate cut. By cutting the interest rate again, it will boost the financial markets once again for the short term, but this will result in the USD to become smaller again compared to other currencies! Remember as well, that oil is also traded in USD. My feel is that the growth of the US markets are still above last year and the fed probably won't want to do that again. Currently, YEN/USD is at 110.17-110.19 - 0.48, which seems to be more stablised.
As for celestial today, as I mentioned a few days ago, the resistance line was at $1.20 and today, the lowest point it hit was at $1.20. Below is the chart:
As shown on the last candle for today, it has a long tail all the way down to $1.20. When it touched that, probably it was the timing as well, that the news came out and it started to move up again in participation of the fed meeting. It has closed above yesterday's closing, and it could probably consolidate within the channel between $1.20 and $1.25.
Today, I was looking at YZJ, and wao, I must say this counter is very very very volatile! It dropped to a low of $1.86 and from there, it started to move up very quickly! Fundamentally speaking, this counter is very good as the shipping industry is very hot now. I missed the chance of entering as I was tied up with work, and when I saw the counter again, it was already trading up at $1.99 and moving up. My policy is never to catch a running train, as it is a big risk to carry the burden if it stops suddenly!
That's probably all for now, as I'm waiting for a chance to enter celestial soon. As for the US markets, HP's strong quarterly results should stablise the markets for the start.
As far as I have gathered, there were 2 different theories behind this surge. One was from hong kong, where they received some news with regards to a fed meeting and speculated to have a rate cut again. This is also reported in money.CNN.com:
At 2 p.m. ET the Federal Reserve is set to release minutes from its meeting last month, which investors will read carefully for clues as to whether the central bank will continue to cut interest rates or leave them unchanged at its final meeting of the year Dec. 11.
http://money.cnn.com/2007/11/20/markets/stockswatch_ny/index.htm?postversion=2007112006
The next one was from Japan, and because of this, nikkei shot back with a +168.96 points (+1.12%). It was from investors that they felt that the counters are all oversold and the buying back resulted in the above. I read about this in the office, which I believe it was from the forums but I couldn't find the thread again. Let me dig again and see whether I can find it or not.
If you have read one of my posts previously, I mentioned about a comment made by Gareth(inthemoneystocks.com) on the patterns that formed on the charts (http://dimitric-trading.blogspot.com/2007/10/5th-oct-2007.html). With the NASDAQ chart as an example, it was an anticipation due to the technical patterns and such, the wrong signal was given as I also anticipated a fall in the STI due to the technical patterns.
With regards to the rate cut, it is important for the fed to determine the severity of the rate cut. By cutting the interest rate again, it will boost the financial markets once again for the short term, but this will result in the USD to become smaller again compared to other currencies! Remember as well, that oil is also traded in USD. My feel is that the growth of the US markets are still above last year and the fed probably won't want to do that again. Currently, YEN/USD is at 110.17-110.19 - 0.48, which seems to be more stablised.
As for celestial today, as I mentioned a few days ago, the resistance line was at $1.20 and today, the lowest point it hit was at $1.20. Below is the chart:
As shown on the last candle for today, it has a long tail all the way down to $1.20. When it touched that, probably it was the timing as well, that the news came out and it started to move up again in participation of the fed meeting. It has closed above yesterday's closing, and it could probably consolidate within the channel between $1.20 and $1.25.
Today, I was looking at YZJ, and wao, I must say this counter is very very very volatile! It dropped to a low of $1.86 and from there, it started to move up very quickly! Fundamentally speaking, this counter is very good as the shipping industry is very hot now. I missed the chance of entering as I was tied up with work, and when I saw the counter again, it was already trading up at $1.99 and moving up. My policy is never to catch a running train, as it is a big risk to carry the burden if it stops suddenly!
That's probably all for now, as I'm waiting for a chance to enter celestial soon. As for the US markets, HP's strong quarterly results should stablise the markets for the start.
Updated my blog
Just updated with my current portfolio, watchlist and closed positions. Quite bad isn't it, especially the call warrant for Capitaland. That was the period where I wasn't knowledgable of the market, and didn't know nuts on TA, FA or whatever! I just merely listen to my broker and this was the result of ignorance. That was a good lesson learnt and I started off from there, buying books on stocks, reading up various websites and watching videos, especially the ones from inthemoneystocks.com, which provided alot of technical analysis skills which I picked and modified accordingly to the current market. Next, I found another broker which has more knowledge on the market. This is also very important as your broker should give you advice on what to do, and not being blur during crisis times.
STI is going to close soon and HSI closed with a +311.04 points (+1.13%), which it opened at 26,583.64 and closed at 27,771.21. I will see the charts for STI tonight and see how it goes.
STI is going to close soon and HSI closed with a +311.04 points (+1.13%), which it opened at 26,583.64 and closed at 27,771.21. I will see the charts for STI tonight and see how it goes.
ARA
As I mentioned, I will be talking about ARA. Here is the background information of ARA from sgx:
ARA Asset Management Limited is an Asian real estate fund management company focused on the management of public-listed REITs and private real estate funds. Its currently manage REITs listed in Singapore, Hong Kong and Malaysia, private real estate funds that invest in Singapore, Hong Kong, Malaysia and China, and a specialist equity fund that invests in REITs and listed infrastructure and utilities trusts in the Asia-Pacific region. Its business comprises three primary segments namely REIT management, private real estate fund management and specialist equity fund management and corporate finance advisory services.
Here is the prospectus from sgx:
http://info.sgx.com/webipo.nsf/34cc00633131539c48256dac0024daf8/6892868dd8bfa47e4825738300061a46/$FILE/ara_final_cbooklet.pdf
Here's another piece of information:
Actually, most of the information are from sgx.com under ARA. Some other things to take note are these information:
http://info.sgx.com/webcorannc.nsf/new+announcement+last+3+months+by+company+name?OpenView&RestrictToCategory=AARA+ASSET+MANAGEMENT+
Under its general announcements, you can see that there's alot of useful information with regards to the shareholders. If you take a look, here are the following extracted. It seems that:
ARA Asset Management Limited is an Asian real estate fund management company focused on the management of public-listed REITs and private real estate funds. Its currently manage REITs listed in Singapore, Hong Kong and Malaysia, private real estate funds that invest in Singapore, Hong Kong, Malaysia and China, and a specialist equity fund that invests in REITs and listed infrastructure and utilities trusts in the Asia-Pacific region. Its business comprises three primary segments namely REIT management, private real estate fund management and specialist equity fund management and corporate finance advisory services.
Here is the prospectus from sgx:
http://info.sgx.com/webipo.nsf/34cc00633131539c48256dac0024daf8/6892868dd8bfa47e4825738300061a46/$FILE/ara_final_cbooklet.pdf
Here's another piece of information:
Actually, most of the information are from sgx.com under ARA. Some other things to take note are these information:
http://info.sgx.com/webcorannc.nsf/new+announcement+last+3+months+by+company+name?OpenView&RestrictToCategory=AARA+ASSET+MANAGEMENT+
Under its general announcements, you can see that there's alot of useful information with regards to the shareholders. If you take a look, here are the following extracted. It seems that:
- Credit Suisse has reduced its holdings of ARA from 6.18 % To 0 % on the 16th of Nov.
- JL Investment Group Limited also adjusted its holdings from 40.8 % To 36.4 %.
- John Lim Hwee Chiang (you can see him in the prospectus), indicated as another shareholder(Director) adjusted his holding from 40.8 % To 36.4 %.
- Cheung Kong Investment Company Limited adjusted from 17.5 % To 15.6 % on 19th Nov.
There's actually more before the 16th of nov but just to cut things short here. In short, my thought on this is, if this counter is really that good, will investors reduce their holdings on this counter? In fact, even a director reduced his own holdings! Well, for Credit Suisse, probably due to the subprime, it is starting to clear its investments, I'm not sure as this is my speculation. But in my opinion, this is also one useful information to see what is the general direction of this counter.
I will go through the prospectus and see the direction of the company, what it aims to acheive and etc etc. As for now, its a bloodbath in the Asian markets and good luck if you have stocks in your hands now. :
20th Nov 2007
Even in a holiday week, dow suffered a drop of -1.66% (-218 points), NASDAQ -1.66% (-43.86 points) and S&P at -1.75% (25.47 points).
For a clearer idea on the trading in the US markets, refer to this youtube video:
http://www.youtube.com/watch?v=kxJPX3KwuMc
If you have seen the video, you can see that NASDAQ is currently on its 200MA, which is one of the resistance line. Needless to explain much, the Thanksgiving holiday is coming soon, and especially Christmas, it is interesting to see whether the americans are going on a bad holiday or not.
Dow has closed below the 13000 point, which was one of its resistance point, and it is very interesting to see what is going to happen tonight. With the media talking about the subprime again over prime time news, business times, one can't help to imagine STI's opening today. The previous time that dow dropped below 13000 was in the August period, STI took the plunge to a low of 2962 as well! I reckon that STI will suffer a beating again when it opens later at 9am.
Other information, oil at the price of $94.64 per barrel, and YEN/USD at 109.90-109.93 - 0.75 which is dropping steadily! This drop in the USD could probably explain the reason why the rise in oil as well as oil is traded in USD. Most of the signs doesn't bold too well for one to go into the market at this point of time.
As for celestial, I forgot to indicate something during my post:
Look at the M and A pattern forming there. I seldom use this as it is seldom that easy to see and identify such patterns. However, it seemed to form this pattern and usually for the M pattern, it will break down from the bottom of the tip of the M (middle). You could also ask why it is not a W pattern from the previous 2 large candles? For the W pattern, it usually forms a double bottom, which means in celestial's case, it didn't form that (look at the red line, no double bottom). Also, now it is at the tail of the A pattern, where it closed below the tip of the start of the A pattern too, which may signify that it didn't form the W pattern again. From these signs, there could be a chance it will be some selling down today to the prices I indicated yesterday but depending on the market sentiment as per normal, that is my opinion.
Time to go to work, and I will talk about ARA when I'm more free in the afternoon.
For a clearer idea on the trading in the US markets, refer to this youtube video:
http://www.youtube.com/watch?v=kxJPX3KwuMc
If you have seen the video, you can see that NASDAQ is currently on its 200MA, which is one of the resistance line. Needless to explain much, the Thanksgiving holiday is coming soon, and especially Christmas, it is interesting to see whether the americans are going on a bad holiday or not.
Dow has closed below the 13000 point, which was one of its resistance point, and it is very interesting to see what is going to happen tonight. With the media talking about the subprime again over prime time news, business times, one can't help to imagine STI's opening today. The previous time that dow dropped below 13000 was in the August period, STI took the plunge to a low of 2962 as well! I reckon that STI will suffer a beating again when it opens later at 9am.
Other information, oil at the price of $94.64 per barrel, and YEN/USD at 109.90-109.93 - 0.75 which is dropping steadily! This drop in the USD could probably explain the reason why the rise in oil as well as oil is traded in USD. Most of the signs doesn't bold too well for one to go into the market at this point of time.
As for celestial, I forgot to indicate something during my post:
Look at the M and A pattern forming there. I seldom use this as it is seldom that easy to see and identify such patterns. However, it seemed to form this pattern and usually for the M pattern, it will break down from the bottom of the tip of the M (middle). You could also ask why it is not a W pattern from the previous 2 large candles? For the W pattern, it usually forms a double bottom, which means in celestial's case, it didn't form that (look at the red line, no double bottom). Also, now it is at the tail of the A pattern, where it closed below the tip of the start of the A pattern too, which may signify that it didn't form the W pattern again. From these signs, there could be a chance it will be some selling down today to the prices I indicated yesterday but depending on the market sentiment as per normal, that is my opinion.
Time to go to work, and I will talk about ARA when I'm more free in the afternoon.
19th Nov 2007 cont:
STI closed with a -29.24 (0.85%), with nikkei -112.05 (-0.74%) and HSI -154.26 (-0.56%), it seems to be a technical breakdown of the index for STI and definitely unexpected from me. As I mentioned in the morning, STI seemed to be affected by HSI and it closed way below its previous close and now at 3411.
As indicated in my chart, if it doesn't close above its 200MA, there is a high chance that it is going to its next resistance line and today's closing indicates a higher possibility! US markets have opened and the market doesn't bold too well. I will change the timing of my posts, as not to confuse people as posting during the trading hours may be confusing. I will try to post before the opening of the STI and after closing of STI, and before the opening of the US markets.
With YEN/USD trading at 110.27-110.28 - 0.38, it is slowly declining again and with US markets not performing well at this point of time, I will post my thoughts tomorrow morning on the US markets. As they are having their holidays now, I'm not too sure on what is the volume traded and I will only be able to see in the morning.
As for celestial, it seems to be a technical breakdown with its closing at $1.23 today. From the channel I have estimated, it has closed below the channel and the next resistance point is at $1.19 - $1.17 (23.6% fibonacci line). It is now not very advisable to enter this counter as there is a higher possibility of a breakdown to that level due to market sentiments. Here is the chart for Celestial:
Even though the market is crashing downwards, it also indicates another buying opportunity for the undervalue counters. I hate to say this, but the money every individual makes is just from another individual.
I just met up with a financial planner, which was one of the forumers from CNA. He had some very insightful thoughts and plans on the market which is very important. Planning is very important as if going in the market without a plan is like going for a marathon without any training!
As indicated in my chart, if it doesn't close above its 200MA, there is a high chance that it is going to its next resistance line and today's closing indicates a higher possibility! US markets have opened and the market doesn't bold too well. I will change the timing of my posts, as not to confuse people as posting during the trading hours may be confusing. I will try to post before the opening of the STI and after closing of STI, and before the opening of the US markets.
With YEN/USD trading at 110.27-110.28 - 0.38, it is slowly declining again and with US markets not performing well at this point of time, I will post my thoughts tomorrow morning on the US markets. As they are having their holidays now, I'm not too sure on what is the volume traded and I will only be able to see in the morning.
As for celestial, it seems to be a technical breakdown with its closing at $1.23 today. From the channel I have estimated, it has closed below the channel and the next resistance point is at $1.19 - $1.17 (23.6% fibonacci line). It is now not very advisable to enter this counter as there is a higher possibility of a breakdown to that level due to market sentiments. Here is the chart for Celestial:
Even though the market is crashing downwards, it also indicates another buying opportunity for the undervalue counters. I hate to say this, but the money every individual makes is just from another individual.
I just met up with a financial planner, which was one of the forumers from CNA. He had some very insightful thoughts and plans on the market which is very important. Planning is very important as if going in the market without a plan is like going for a marathon without any training!
19th Nov 2007
Markets have opened and STI opened with a high of 3461. Nikkei was trading with a positve 110 points before it dropped back to-28 points! Currently at 1pm, STI is trading too, with a negative 13 points. It seems to be affected by the opening of HSI, which is currently trading at -241 points as well.
As I mentioned yesterday, I predicted that STI should be closing in the range of 3460, however, it seems badly affected by HSI currently, which is showing some weakness. I do not know why, probably due to the USD and heavy shorting recently in HSI. I'm not an avid fan in HSI and probably got to read the forums to find out more. Still a 2nd half to go, let's see how it goes. :)
As for celestial, volume is practically low and movement is still within the channel I anticipated. Take note that the RSI, MACD and stochastics are relatively low and I believe it is almost time to move in, but the most important factor is still market sentiment which must turn around first. Another counter that I'm looking at is ARA, a financial asset management counter that manages reits. Alot of people have very high expectations of this counter, which I'm doing some research on it currently, and will soon determine its direction. However, as far as I'm concerned, I'm looking in a few factors as follows:
This week is Thanksgiving in US, so light trading is a high possibility in the US markets.
Other news: Yen strengthening against all other currencies.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1UITs5.j3sM&refer=home
Year end is coming and the cursed 10 year cycle will be broken soon with this year if everything goes well of course. That's all for now, and if I have anymore information, I will post it soon! :)
As I mentioned yesterday, I predicted that STI should be closing in the range of 3460, however, it seems badly affected by HSI currently, which is showing some weakness. I do not know why, probably due to the USD and heavy shorting recently in HSI. I'm not an avid fan in HSI and probably got to read the forums to find out more. Still a 2nd half to go, let's see how it goes. :)
As for celestial, volume is practically low and movement is still within the channel I anticipated. Take note that the RSI, MACD and stochastics are relatively low and I believe it is almost time to move in, but the most important factor is still market sentiment which must turn around first. Another counter that I'm looking at is ARA, a financial asset management counter that manages reits. Alot of people have very high expectations of this counter, which I'm doing some research on it currently, and will soon determine its direction. However, as far as I'm concerned, I'm looking in a few factors as follows:
- the direction of the organization
- the future potential of the organization
- what are the countries that this organization has invested in?
As far as I know, this company collects revenue through various reits and it doesn't really sound very appealing to me. It sounds more speculative more than investing for this counter, however, this may not be true until my research is complete. Next, it is currently trading at $1.14 at 1.30pm, and the IPO price is at $1.15! Normally, the IPO price is one of the resistance point and it shouldn't go past its IPO pricing. As this counter was launched only recently, there won't be any 200MA for this, but only the 20MA and 50MA, in my opinion may not be very accurate due to high market fluctuation for this counter.
This week is Thanksgiving in US, so light trading is a high possibility in the US markets.
Other news: Yen strengthening against all other currencies.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1UITs5.j3sM&refer=home
Year end is coming and the cursed 10 year cycle will be broken soon with this year if everything goes well of course. That's all for now, and if I have anymore information, I will post it soon! :)
18 Nov 2007
Didn't had a chance to post on saturday as I attended a wedding dinner and went back to office for work after that till sunday morning.
As shown on dow, it opened with a good start, and I guessed it scared the shortists quite abit as I mentioned in my previous post regarding the calls and puts ratio. However, after the opening, it went down and traded slightly below about -0.5% if I remember correctly. Do remember that I mentioned the big money will want to make money from the majority, which is shown in the call and puts ratio. With a higher put warrant ratio, it is obvious that they can make money from the puts by pushing the indexes up! When the markets closed, dow closed with a positive 66 points (0.51%), NASDAQ at 18.73 points (0.72%) and S&P at 7.59 (0.52%).
With YEN/USD at 110.96-110.98 + 0.88, it is still a worrying cause. With oil prices rising back to $95 again, you probably will wonder if this will be another factor again. Hard to say, and why do I say that? Oil prices are spooked right now due to the shadows of the subprime and the deflating USD. However, please take a look and monitor the USD against other currencies. It seems that it is now growing back slightly and slowly! This is a weekly chart of the USD vs SGD:
http://sg.finance.yahoo.com/q/bc?s=USDSGD=X&t=5d&l=on&z=m&q=l&c=
If you can see, Tuesday and thursday is the lowest point, and it is slowly moving uptrend. However, it is only the yen that the USD is not strengthing itself against. More to take note with regards to this factor.
Next week is the holiday week for US markets, so there is a high possibility that it will have low volume in play in the US markets.
Here is a chart of the STI:
Looking at the STI, friday's close was below its 200MA, which is 1 of the major resistance line, and also, this close is near to the 50% fibonacci line. If STI closes again below its resistance line at 200MA, there is a high chance that it will fall back probably to around 3321 which is 1 of the resistance point or it may be even lower depending on the situation. My take on this is STI should be closing nicely at around 3461 or slightly higher on monday.
Another point to take note is the trading periods in a year. Especially in the end of the year, trading is very volatile because most of the companies are releasing their year end results and expectations are very high during this period. I forgot which book I read, that it indicates March till June is the good period for buying in stocks. If you have chartnexus, you can see from the STI chart, from the past 2 years, it has indicated as such. However, do take this with a pinch of salt as it may not be accurate and I do not have the 10 years record too.
Lastly, enjoy the weekends while there is still! :)
As shown on dow, it opened with a good start, and I guessed it scared the shortists quite abit as I mentioned in my previous post regarding the calls and puts ratio. However, after the opening, it went down and traded slightly below about -0.5% if I remember correctly. Do remember that I mentioned the big money will want to make money from the majority, which is shown in the call and puts ratio. With a higher put warrant ratio, it is obvious that they can make money from the puts by pushing the indexes up! When the markets closed, dow closed with a positive 66 points (0.51%), NASDAQ at 18.73 points (0.72%) and S&P at 7.59 (0.52%).
With YEN/USD at 110.96-110.98 + 0.88, it is still a worrying cause. With oil prices rising back to $95 again, you probably will wonder if this will be another factor again. Hard to say, and why do I say that? Oil prices are spooked right now due to the shadows of the subprime and the deflating USD. However, please take a look and monitor the USD against other currencies. It seems that it is now growing back slightly and slowly! This is a weekly chart of the USD vs SGD:
http://sg.finance.yahoo.com/q/bc?s=USDSGD=X&t=5d&l=on&z=m&q=l&c=
If you can see, Tuesday and thursday is the lowest point, and it is slowly moving uptrend. However, it is only the yen that the USD is not strengthing itself against. More to take note with regards to this factor.
Next week is the holiday week for US markets, so there is a high possibility that it will have low volume in play in the US markets.
Here is a chart of the STI:
Looking at the STI, friday's close was below its 200MA, which is 1 of the major resistance line, and also, this close is near to the 50% fibonacci line. If STI closes again below its resistance line at 200MA, there is a high chance that it will fall back probably to around 3321 which is 1 of the resistance point or it may be even lower depending on the situation. My take on this is STI should be closing nicely at around 3461 or slightly higher on monday.
Another point to take note is the trading periods in a year. Especially in the end of the year, trading is very volatile because most of the companies are releasing their year end results and expectations are very high during this period. I forgot which book I read, that it indicates March till June is the good period for buying in stocks. If you have chartnexus, you can see from the STI chart, from the past 2 years, it has indicated as such. However, do take this with a pinch of salt as it may not be accurate and I do not have the 10 years record too.
Lastly, enjoy the weekends while there is still! :)
16th Nov 2007
Close to a 1% drop in dow and nasdaq and with a 1.32% drop in S&P, it has reflected in the asian markets, showing a sea of red across various indexes.
With the release of:
- a 0.2% rise in CPI, and
- a 0.3% rise in cost of living,
I'm still not sure whether this was the key factor that caused the drop. Why? Well, it is definitely expected that the cost of living and CPI will rise as we progress technologically and our standard of living. Commodities will rise in accordance to this. Simple fact of life is if you can recall how much you paid for a meal at the restaurant or at a food centre 1-2 years ago and to now? However, the rise of a 0.2% in my opinion is not that huge of a concern, but my main concern would be still deflation of the USD and high oil prices.
YEN/USD still at this range of 110.08-110.10 - 1.31, which shows the weakness of the USD, and some indications of a recession in today's Business Times, which pretty much sums up the rest.
Tomorrow is options expiration, which traders will groom up their portfolios, is a key factor to take note. Next is the holiday next week in the US, which is Thanksgiving. During this period, it is normal to have light volume trading which normally in my opinion won't let the market fall. It is also quite risky as light volume is able to control the pricing of the stocks and push it up and down accordingly.
My take on the US market, is that it may probably open lower and close near to its opening or even positive! Why do I say that? If you had watched the charts of the US markets (dow, nasdaq, S&P), you would have noticed that it suffered heavy selling during the last trading hours and yesterday, it started in the early afternoon (in US) and during the last hour of trading, there was a sudden surge of buying! Apart from this, if you watched the youtube video from inthemoneystocks.com, they indicated the number of put warrants and call warrants that are bought up, which indicated a 1.5x more for put warrants than call warrants. This can be seen that more people believe that the market is going downtrend. In the video, he also said that when this happens, think the opposite. The chances of the market going uptrend for that day would be higher as big money won't let the shortists make the money that easily! Also, comparing the pool of puts and calls, the big money will also make more from the puts than the call warrants!
In Singapore market, it looks kinda gloomy, with most of the counters in my watchlist have suffered a small pullback, probably profit taking. As for the chart for celestial, I forgot to include the trading candle for yesterday, but it is still within the channel that I have indicated. As of now, it is now:
- trading at $1.28,
- opened at $1.28, indicating a drop of 3 cents
- lowest at $1.27
- highest at $1.29
- volume traded is 479
I would need to see the 20,50 and 200MA after today's closing, RSI, MACD and stochastics to see its direction. As far as it goes now, $1.25 is a good entry point, but if it closes below that, it probably will hit back to $1.20 which is the next resistance point that I indicated.
It will be interesting to see if I can get the call and put warrants ratio for STI, which will strengthen the probability as well. :)
Chart for celestial
Here is the chart for celestial today:
Today's closing price is at $1.31, which is shown in the picture below:
Take a look at the circle on the right side. The candle has a long wick and what does it mean? There are a few possibilities, which one of it is is the low volume today, and the weak push. Usually when this happens, it has a possibility that it will close below this price or close at same price tomorrow. Do take note that this is just a technical indicator and it really varies on the market itself. A sign of a bull is on the left circle, take a look at the white candle with a long wick tail. When this happens, it means that there is very strong support and it can be seen on the next day as well. However, this is not the only key factor to take note! Market sentiment is very important and it is critical to take note during the period as well.
The left circle which I indicated, is another thing I want to bring up. Looking at the big white candle and the black candle. For example, if it has made such a big surge after a few days, if the black candle close lower than its previous closing, this may indicate a sell signal. Next, the next position it should stabilise is at the 50MA (green) which is 1 of the major resistance point. Currently, it has traded below all its 20,50 and 200MA already, and trading within the 50% and 38.2% fibonacci line. My take on this is, either it will trade within the parallel channels I have indicated or the up trending channel with the 50MA till the 20MA touches the 50MA.
I also feel that it should take another 2-3 days to consolidate and there should be a breakout. Next to take note is china's policy implementations these few days and weeks.
Now, YEN/USD is currently at 110.73-110.74 - 0.64, which dropped back slightly again, which in my opinion is not stable yet. More indicators like the CPI will be available tonight after dow opens.
Currently, the subprime is not the key spook in the financial market in my opinion, but still inflation and deflation of USD as I have mentioned very early beforehand. Time lag between that period till now has caused this balloon to grow to this extent and now everyone feels the heat now.
Today's closing price is at $1.31, which is shown in the picture below:
Take a look at the circle on the right side. The candle has a long wick and what does it mean? There are a few possibilities, which one of it is is the low volume today, and the weak push. Usually when this happens, it has a possibility that it will close below this price or close at same price tomorrow. Do take note that this is just a technical indicator and it really varies on the market itself. A sign of a bull is on the left circle, take a look at the white candle with a long wick tail. When this happens, it means that there is very strong support and it can be seen on the next day as well. However, this is not the only key factor to take note! Market sentiment is very important and it is critical to take note during the period as well.
The left circle which I indicated, is another thing I want to bring up. Looking at the big white candle and the black candle. For example, if it has made such a big surge after a few days, if the black candle close lower than its previous closing, this may indicate a sell signal. Next, the next position it should stabilise is at the 50MA (green) which is 1 of the major resistance point. Currently, it has traded below all its 20,50 and 200MA already, and trading within the 50% and 38.2% fibonacci line. My take on this is, either it will trade within the parallel channels I have indicated or the up trending channel with the 50MA till the 20MA touches the 50MA.
- MACD is almost below 0,
- RSI at close to 30%, and
- stochastics below 20%.
I also feel that it should take another 2-3 days to consolidate and there should be a breakout. Next to take note is china's policy implementations these few days and weeks.
Now, YEN/USD is currently at 110.73-110.74 - 0.64, which dropped back slightly again, which in my opinion is not stable yet. More indicators like the CPI will be available tonight after dow opens.
Currently, the subprime is not the key spook in the financial market in my opinion, but still inflation and deflation of USD as I have mentioned very early beforehand. Time lag between that period till now has caused this balloon to grow to this extent and now everyone feels the heat now.
15th Nov 2007
As expected, due to dow's weak performance last night, probably due to rising oil prices again, and profit taking, asian market is feeling the heat as well. STI, with a drop of 0.77% today, is showing mixed results in my portfolio. As of now, most of the counters are picking up again after a morning slight profit taking.
YEN/USD currently at 111.35-111.36 - 0.02, which is increasing slightly, signifies a better chance that the stock market may recover too. It still depends on various indicators. Tonight, the release of the CPI results in US will determine the direction, and with friday coming, traders in US to close their portfolio (options expiration (I'm not sure whether it's spelt like this)), certain stocks will be suffering while others get the boost. Well, traders won't want to hold speculative or lousy stocks in their portfolio don't they? :)
As for celestial, I feel that it is almost time to buy in. It seems that it is starting to consolidate and pretty low volume for the day, and trading within the channel of $1.30 - $1.32. When it touched $1.29, it was covered back and when it hit $1.33, the seller queue increased. I will go back tonight and see the charts and determine a good entry price. Celestial didn't have much of a volume today, and the volume was just small buys and sells, and not really much of a movement. YZJ didn't have much of a movement, a drop of 3cents at this moment, probably profit taking.
After watching the video from inthemoneystocks.com in youtube, I've learned another technical analysis tool which is the 2 candle sticks. Probably there's a term for it, but I do not know what it is called, but understanding the fundamentals is more important and it made me understand the movement of celestial better as well. I will post the chart tonight and explain more in details.
YEN/USD currently at 111.35-111.36 - 0.02, which is increasing slightly, signifies a better chance that the stock market may recover too. It still depends on various indicators. Tonight, the release of the CPI results in US will determine the direction, and with friday coming, traders in US to close their portfolio (options expiration (I'm not sure whether it's spelt like this)), certain stocks will be suffering while others get the boost. Well, traders won't want to hold speculative or lousy stocks in their portfolio don't they? :)
As for celestial, I feel that it is almost time to buy in. It seems that it is starting to consolidate and pretty low volume for the day, and trading within the channel of $1.30 - $1.32. When it touched $1.29, it was covered back and when it hit $1.33, the seller queue increased. I will go back tonight and see the charts and determine a good entry price. Celestial didn't have much of a volume today, and the volume was just small buys and sells, and not really much of a movement. YZJ didn't have much of a movement, a drop of 3cents at this moment, probably profit taking.
After watching the video from inthemoneystocks.com in youtube, I've learned another technical analysis tool which is the 2 candle sticks. Probably there's a term for it, but I do not know what it is called, but understanding the fundamentals is more important and it made me understand the movement of celestial better as well. I will post the chart tonight and explain more in details.
14th Nov 2007
Fantastic run up from dow last night, with a rally of 319 points (2.46%), NASDAQ 89 points (3.46%). Oil is slipping back slowly, now at a price of around $91 per barrel. Does this means we are back in business? Hard to say, but in my opinion, it still requires the consolidation period. The market doesn't do a sharp u-turn and surge all the way up non stop. As I mentioned before, it has to consolidate its base within a channel and start move upwards.
With YEN/USD trading at 110.87-110.92 + 0.78, it is still not inducing me to open a position yet. As for asian markets, it was expected to open nicely with the gapping up of dow, with STI opening with 1+%, same goes to nikkei and hang seng opening with 900+ points! Now, it is nice to see stocks or markets opening at very high increase, but one thing to take note is, when there is a huge gap up, take caution as it is normal that there is a gap down the next day. It is important to cover that huge gap, and the bigger the gap, the larger the covering or the longer it takes (slowly dropping or fast dropping).
One counter to take note is YZJ, where it has probably surge 22cents for the past 3 days! You can say that this counter is still undervalue, and I see that the potential for this shipping company is very high, but in this irrational market, it doesn't justify the surging literally everyday!
If my model goes well, the US market for tonight may be a very small increase or decrease or a flat, unless some big news comes out.
As of now, celestial has taken a rise of 6cents which is close to my model's prediction of 10cents. It seems to be that the stocks are starting to slow down its pace.
Next, I'm going to learn some more new stuffs, which are more in fundamental analysis as compared to technical analysis. Going mid term is more fruitful as returns are higher and considered lesser risk as well. Another skill that I got to learn is the way to short the market. This is very important to have so that you can earn both ways being in a bull or bear market. Considering the fact that it rises 10 cents and drops 30 cents everytime, which can make more money? But shorting has a very big risk, which leave you in a very open position which you can't cover back. You can only buy back the shares immediately and incur the loss straight! As far as my account goes, they only gave me T + 3, and my broker recommended me to open a CFD account which allows a 1 month period. But once again, shorting is for very experienced investors and definitely not for the faint hearted.
With YEN/USD trading at 110.87-110.92 + 0.78, it is still not inducing me to open a position yet. As for asian markets, it was expected to open nicely with the gapping up of dow, with STI opening with 1+%, same goes to nikkei and hang seng opening with 900+ points! Now, it is nice to see stocks or markets opening at very high increase, but one thing to take note is, when there is a huge gap up, take caution as it is normal that there is a gap down the next day. It is important to cover that huge gap, and the bigger the gap, the larger the covering or the longer it takes (slowly dropping or fast dropping).
One counter to take note is YZJ, where it has probably surge 22cents for the past 3 days! You can say that this counter is still undervalue, and I see that the potential for this shipping company is very high, but in this irrational market, it doesn't justify the surging literally everyday!
If my model goes well, the US market for tonight may be a very small increase or decrease or a flat, unless some big news comes out.
As of now, celestial has taken a rise of 6cents which is close to my model's prediction of 10cents. It seems to be that the stocks are starting to slow down its pace.
Next, I'm going to learn some more new stuffs, which are more in fundamental analysis as compared to technical analysis. Going mid term is more fruitful as returns are higher and considered lesser risk as well. Another skill that I got to learn is the way to short the market. This is very important to have so that you can earn both ways being in a bull or bear market. Considering the fact that it rises 10 cents and drops 30 cents everytime, which can make more money? But shorting has a very big risk, which leave you in a very open position which you can't cover back. You can only buy back the shares immediately and incur the loss straight! As far as my account goes, they only gave me T + 3, and my broker recommended me to open a CFD account which allows a 1 month period. But once again, shorting is for very experienced investors and definitely not for the faint hearted.
Celestial's chart
Here is the chart for celestial:
From the horizontal trendline, that is the current support line ($1.25). As far as I see, MACD is falling back to zero soon, RSI constantly below 50% and stochastics touching the 20% mark. Now, here's the catch. Dow has rebounded back at about 100 points and I do not foresee it dropping at its closing. One thing that worries is the YEN/USD trade. This is the most critical part where everyone is probably missing out here.
Which is more critical? Rising oil prices vs deflating USD? Tough choice, especially when both affects any individuals directly and indirectly. With oil prices steadily dropping, currently at $92.45 per barrel, it is in my opinion still overpriced. The high price is due to the spook of the war caused and suddenly so many bad news about oil. If it remained within the $80-$85 mark, it should probably stabilize the market.
As for the USD, think of it this way, when the value of your currency drop, it just simply means that you can afford lesser things (imported stuffs). Why? Imports are dealt with USD towards the country's currency. When USD deflates, it just means that more USD is being paid for the product, and in turns, the supplier would need to increase the price slightly to adjust to this. When this happens, the consumer indirectly won't be able to buy more with the deflated currency.
When this happens, consumers buy less, suppliers can't buy more, imports fall, the country exports also fall. This is a domino effect and Asian countries depend heavily on exports to USA.
As for celestial, the report has been released and it has produced a nice report card as follows:
The overall favourable business environment has enabled the Group to continue its growth in all product segments. Total sales of the Group have grown by 46.4% from RMB310.3 million in 2006Q3 to RMB454.3 million in 2007Q3. Significant growth was noted for the product lines (including industrial proteins, biochemical feedstuff and lecithin, etc) in the Soybean Zone, which commenced operation in the second half of 2006.
The Group's overall gross profit margin has dropped from 42.2% in 2006Q3 to 39.0% in 2007Q3, mainly as a result of change in sales mix and increase in raw material costs. Attributable to the promising growth in sales, the Group's gross profit has increased from RMB131.1 million in 2006Q3 to RMB177.1 million in 2007Q3. Average soybean costs have increased by 24.7% from RMB2,216 per ton in 2006Q3 to RMB2,763 per ton in 2007Q3. Given this, the following factors have mitigated
the impact brought by the cost pressure:
(i) The Group has increased its selling prices gradually.
(ii) The Group continued to improve its efficiency and utilisation of the production facilities to reduce its costs as evident from the improved gross margins.
The Group's reported net profit has increased by 35.8% from RMB77.2 million in 2006Q3 to RMB104.8 million. The Group's net operating profit has grown by 21.6% from RMB102.1 million in 2006Q3 to RMB124.2 million in 2007Q3.
Another interesting information on celestial:
As announced in 2006, the Group has entered into a contract for the production of bio-diesel with target annual capacity of 100,000 tonnes. The Group has started individual machinery testing, and expects to commence the trial run by end of this year. In preparation, the Group has been negotiating with several potential (both local and overseas) customers for the sales of bio-diesel. Announcements will be made when more details are finalised.
In 2007, the Group has announced expansion plans on the following new health food and beverages:
- High protein nutrient beverages (target annual capacity of 15,000 tonnes)
- High protein nutrient powder (target annual capacity of 5,000 tonnes)
- High protein nutrient noodles (target annual capacity of 10,000 tonnes)
- High protein nutrient pastries (target annual capacity of 5,000 tonnes)
As of all these plans, it indicates celestial as a very nice potential company to stay invested. While I'm more interested in its bio-diesel investment, as this is a source of alternate energy which is very future looking. The only thing lacking now is the clarity of the market to open the position in celestial. Tomorrow, there may be a high chance that celestial will surge quite a fair bit, probably by 10 cents coupled by dow (if it stays in the +1% mark). Still, when the market dropped a total of 900 points for dow, a rise of 100 points now doesn't really make much of a difference eh. :)
As of now, NASDAQ is the leading index, with 1.71% increase (12am). I have mentioned this before, for any major fall or recession, tech counters must be the one leading out of the mess. However, when anything falls, tech counters or NASDAQ will also suffer the most.
Time to take a break and get ready for tomorrow. Anything can happen and I'm ready to take a position. :)
From the horizontal trendline, that is the current support line ($1.25). As far as I see, MACD is falling back to zero soon, RSI constantly below 50% and stochastics touching the 20% mark. Now, here's the catch. Dow has rebounded back at about 100 points and I do not foresee it dropping at its closing. One thing that worries is the YEN/USD trade. This is the most critical part where everyone is probably missing out here.
Which is more critical? Rising oil prices vs deflating USD? Tough choice, especially when both affects any individuals directly and indirectly. With oil prices steadily dropping, currently at $92.45 per barrel, it is in my opinion still overpriced. The high price is due to the spook of the war caused and suddenly so many bad news about oil. If it remained within the $80-$85 mark, it should probably stabilize the market.
As for the USD, think of it this way, when the value of your currency drop, it just simply means that you can afford lesser things (imported stuffs). Why? Imports are dealt with USD towards the country's currency. When USD deflates, it just means that more USD is being paid for the product, and in turns, the supplier would need to increase the price slightly to adjust to this. When this happens, the consumer indirectly won't be able to buy more with the deflated currency.
When this happens, consumers buy less, suppliers can't buy more, imports fall, the country exports also fall. This is a domino effect and Asian countries depend heavily on exports to USA.
As for celestial, the report has been released and it has produced a nice report card as follows:
The overall favourable business environment has enabled the Group to continue its growth in all product segments. Total sales of the Group have grown by 46.4% from RMB310.3 million in 2006Q3 to RMB454.3 million in 2007Q3. Significant growth was noted for the product lines (including industrial proteins, biochemical feedstuff and lecithin, etc) in the Soybean Zone, which commenced operation in the second half of 2006.
The Group's overall gross profit margin has dropped from 42.2% in 2006Q3 to 39.0% in 2007Q3, mainly as a result of change in sales mix and increase in raw material costs. Attributable to the promising growth in sales, the Group's gross profit has increased from RMB131.1 million in 2006Q3 to RMB177.1 million in 2007Q3. Average soybean costs have increased by 24.7% from RMB2,216 per ton in 2006Q3 to RMB2,763 per ton in 2007Q3. Given this, the following factors have mitigated
the impact brought by the cost pressure:
(i) The Group has increased its selling prices gradually.
(ii) The Group continued to improve its efficiency and utilisation of the production facilities to reduce its costs as evident from the improved gross margins.
The Group's reported net profit has increased by 35.8% from RMB77.2 million in 2006Q3 to RMB104.8 million. The Group's net operating profit has grown by 21.6% from RMB102.1 million in 2006Q3 to RMB124.2 million in 2007Q3.
Another interesting information on celestial:
As announced in 2006, the Group has entered into a contract for the production of bio-diesel with target annual capacity of 100,000 tonnes. The Group has started individual machinery testing, and expects to commence the trial run by end of this year. In preparation, the Group has been negotiating with several potential (both local and overseas) customers for the sales of bio-diesel. Announcements will be made when more details are finalised.
In 2007, the Group has announced expansion plans on the following new health food and beverages:
- High protein nutrient beverages (target annual capacity of 15,000 tonnes)
- High protein nutrient powder (target annual capacity of 5,000 tonnes)
- High protein nutrient noodles (target annual capacity of 10,000 tonnes)
- High protein nutrient pastries (target annual capacity of 5,000 tonnes)
As of all these plans, it indicates celestial as a very nice potential company to stay invested. While I'm more interested in its bio-diesel investment, as this is a source of alternate energy which is very future looking. The only thing lacking now is the clarity of the market to open the position in celestial. Tomorrow, there may be a high chance that celestial will surge quite a fair bit, probably by 10 cents coupled by dow (if it stays in the +1% mark). Still, when the market dropped a total of 900 points for dow, a rise of 100 points now doesn't really make much of a difference eh. :)
As of now, NASDAQ is the leading index, with 1.71% increase (12am). I have mentioned this before, for any major fall or recession, tech counters must be the one leading out of the mess. However, when anything falls, tech counters or NASDAQ will also suffer the most.
Time to take a break and get ready for tomorrow. Anything can happen and I'm ready to take a position. :)
13th Nov 2007
Finally my exams are over, and I'm back at looking at the charts for the stock markets. :)
Tough paper I took, which really drain more than half my life. Especially history of management thoughts, woo! Anyway, I have seen the US markets recently and it seems that it has taken another beating down and as of now, it is below the 13000 mark. What does this signify? It was at this point too in Sept before the fed rate cut to save the markets. From then, the surge of a 1000 points and taken out again within a few days! Asian markets also took quite a fair bit of dropping, with STI maintaining about 3500 as of 10am. Unlike the previous time, the news this time was more on inflation, depreciation of the USD, and rising oil prices. While I spoke of this earlier, inflation is gonna spook the markets. With the depreciation of the USD, oil prices are bound to rise as oil is traded in USD. When USD drops, it means you use more USD to buy oil. Simple economics here. The mention of the subprime again, but this time round, it seems like its impact is getting lesser and lesser as the oil prices was the main killer here.
In Singapore market, many stocks have suffered the same fate too. My monitored counters like YZJ and celestial, dropped back quite a fair bit. When this happens, it indicates a good chance for me to re-enter celestial again. I was reading the charts for celestial and it is almost time to re-enter a position for it. It has breached past its 20,50 and 200MA already and at the 38.2% fibonacci area. As far as I see, the 38.2% mark indicates a price at $1.17. If it ever really fall to that, it is really a good buy and hold.
Taking an indication from dow, as I said earlier, this counter typically follows the pattern of dow, and dow has been dropping for the past 4 days. As far as I see, it has never last through more than a week. Also, my feel is that the market is quite spoofed of this huge drop and it's like a repeat of what happened in August to September again! I will post a chart analysis I made for celestial and indicate a good move in when it happens. Now is still not the time yet. Why? Take note of any recovery from a major drop, the first to move is always the blue chips. If the blue chips never move, you expect all the 2nd tier and 3rd tier stocks to move? If the news tell you the stock market is dropping everyday, noone is gonna buy any stocks at all! This is psychology at play, and big buyers always do this.
Second factor is the consolidation period. Every counter has to go through this normally. It doesn't do a super sharp retractment and bounce up straight away when it takes a huge drop. It usually goes through a period of small up and down within a channel and depending on the market sentiment, and do a breakout. As my previous charting shown, celestial went through that within the $1.18 - $1.22 channel for more than a week before the china stock play.
Another news from china is, china government has ordered the banks to increase its reserves to curb the bullish markets in china.
Next is the Yen/USD trade. This is the website for the latest update:
http://www.nni.nikkei.co.jp/CF/FR/MKJ/
As of now, it is at 110.25-110.27 - 0.07, which in my opinion, very dangerous! 116 at its normal, now trading way below its value, is showing very strong weakness in the USD and strengthening of the yen again!
Lastly, patience is very important in this market now! The counters being monitored by me are:
Tough paper I took, which really drain more than half my life. Especially history of management thoughts, woo! Anyway, I have seen the US markets recently and it seems that it has taken another beating down and as of now, it is below the 13000 mark. What does this signify? It was at this point too in Sept before the fed rate cut to save the markets. From then, the surge of a 1000 points and taken out again within a few days! Asian markets also took quite a fair bit of dropping, with STI maintaining about 3500 as of 10am. Unlike the previous time, the news this time was more on inflation, depreciation of the USD, and rising oil prices. While I spoke of this earlier, inflation is gonna spook the markets. With the depreciation of the USD, oil prices are bound to rise as oil is traded in USD. When USD drops, it means you use more USD to buy oil. Simple economics here. The mention of the subprime again, but this time round, it seems like its impact is getting lesser and lesser as the oil prices was the main killer here.
In Singapore market, many stocks have suffered the same fate too. My monitored counters like YZJ and celestial, dropped back quite a fair bit. When this happens, it indicates a good chance for me to re-enter celestial again. I was reading the charts for celestial and it is almost time to re-enter a position for it. It has breached past its 20,50 and 200MA already and at the 38.2% fibonacci area. As far as I see, the 38.2% mark indicates a price at $1.17. If it ever really fall to that, it is really a good buy and hold.
Taking an indication from dow, as I said earlier, this counter typically follows the pattern of dow, and dow has been dropping for the past 4 days. As far as I see, it has never last through more than a week. Also, my feel is that the market is quite spoofed of this huge drop and it's like a repeat of what happened in August to September again! I will post a chart analysis I made for celestial and indicate a good move in when it happens. Now is still not the time yet. Why? Take note of any recovery from a major drop, the first to move is always the blue chips. If the blue chips never move, you expect all the 2nd tier and 3rd tier stocks to move? If the news tell you the stock market is dropping everyday, noone is gonna buy any stocks at all! This is psychology at play, and big buyers always do this.
Second factor is the consolidation period. Every counter has to go through this normally. It doesn't do a super sharp retractment and bounce up straight away when it takes a huge drop. It usually goes through a period of small up and down within a channel and depending on the market sentiment, and do a breakout. As my previous charting shown, celestial went through that within the $1.18 - $1.22 channel for more than a week before the china stock play.
Another news from china is, china government has ordered the banks to increase its reserves to curb the bullish markets in china.
Next is the Yen/USD trade. This is the website for the latest update:
http://www.nni.nikkei.co.jp/CF/FR/MKJ/
As of now, it is at 110.25-110.27 - 0.07, which in my opinion, very dangerous! 116 at its normal, now trading way below its value, is showing very strong weakness in the USD and strengthening of the yen again!
Lastly, patience is very important in this market now! The counters being monitored by me are:
- Celestial
- YZJ
- Asia Env
- Ara (this counter is very dangerous)
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