Golden Trading and Investing Strategies: July 2020

My view on the Capitol hill grilling of the Big Mega Tech

Interestingly from that 5 hours grilling session, only Facebook was the one that blames China for stealing US technology. Apple says no, Google says no, Amazon says no.

Remember all 3 big Tech (Apple, Google, Amazon) has big stakes in China while Facebook is banned.

Disclaimer: Whatever posted here is purely my personal view. It is not an inducement to trade and not responsible for any losses. Tips and News might just be rumors in the market. I take no responsibility for any gains or losses as a result of reading my analyses, judgement and opinions. Trade with care and diligence please!

Hang Seng Tech Index up by 0.77%

Quick updates for today:

Hang Seng Tech Index was up by 0.77% today primarily held up by SMIC (0981.HK), KOOLEARN (1797.HK), AAC TECH (2018.HK), FIT HON TENG (6088.HK) and BYD (0285.HK) which were all up more than 3% and overall turnover of 30.02 billion.

The big names like Tencent (0700.HK), Xiaomi (1810.HK), Alibaba (9988.HK), Meituan (3690.HK) were mainly flat or down. It seems like there's some rotational play in the HSIT constituent stocks and we will continue to monitor when the ETF tracking fund will be up and running for HSI Tech, similar to HSI ETF and HSCEI ETF.

It is important from Hong Kong/China's perspective to ensure that this index remains healthy and not get hammered down since its launch early this week to be comparable against the US Nasdaq.

Below courtesy from Aastocks.com

Apple beating estimates and announced stock split 4 for 1

Apple has once again prove that it can sell in any environment and its record quarter has just made it easy for them to do the stock split. Currently premarket is trading at 408 and by August 31 if it maintains, we would likely see share prices at around 100 again which gives opportunities for retailers to buy their shares.

Their current market cap is close to 1.7 trillion and looking at their trajectory, it is well on track to hit the 2 trillion mark.

People queue outside the Apple new flagship store at Sanlitun on July 17, 2020 in Beijing, China.

Quan Yajun | Visual China Group | Getty Images

https://www.cnbc.com/2020/07/30/apple-just-announced-a-stock-split-heres-what-that-means-for-investors.html

Gold and Silver... again

Based on last night's movement, Gold has once again pushed up higher with its high of 1959 for Gold Futures. Looking at the GLD ETF that tracks Gold, it also moved up 0.76%.

However Silver did not follow the uptrend and there's likely profit taking with a fall of -0.52% for Silver Futures and SLV ETF dropping 0.88%.

Daily charts: Gold has been gapping up and Silver seems to be topping out or consolidating but likely more of topping out since its gap up from $17.

Weekly charts: Looking at both GLD and SLV charts, it is already a parabolic move and it is likely the news will continue to talk about Gold and Silver which may draw retailers to push it higher while the big boys may take the opportunity to offload at the same time.

Wait for pullbacks to identify support levels. Take real caution if you want to enter these two precious metals at this moment.

GLD Daily

GLD Weekly

SLV Daily

SLV Weekly

Singapore Banks likely to cut their dividends

Not surprising, the latest news in Singapore is on the potential dividend cut from the 3 local banks, DBS, OCBC and UOB. Please note that Singapore is lagging behind in this as all EU banks are not allowed to pay dividends or stock buybacks and US banks has some restrictions but the big US banks have cleared those requirements though apart from Wells Fargo.

DIVIDEND cuts by Singapore banks may happen "as early as" the upcoming payout to be announced in the second quarter, with the regulator reviewing banks’ capital plans amid prolonged economic uncertainty, said DBS Group Research in a report this week.

The Monetary Authority of Singapore (MAS) said last Thursday it is in close discussions with banks on their capital management ahead, which would include conversations around - though not limited to - restricting dividend payouts. Banks "should start early and not wait until the capital position starts looking weaker", MAS managing director Ravi Menon had told reporters.

Source: Singapore Business Times

Looking at the intraday effect on the 3 banks, all 3 banks have dropped more than 2% (DBS at -3%, UOB at -2.6%, OCBC at -3.48%).

Let's take a look at the daily and weekly chart of DBS and it has crossed over to the 100MA and touching the 38.2% Fibonacci. Will need to monitor if the support will be at the 38.2% mark.

Looking at the weekly chart, it is now at the end the big green bar of week of 1 June so we will need to see if it closes below that today ($19.54) taking into consideration that Friday is a public holiday in Singapore so its a shorter week.

* I do not own any DBS shares currently.

DBS Daily as of 11am HKT

DBS Weekly

Congress grills tech CEOs amid backdrop of coronavirus and economic struggles

For more than six hours, members of the House Antitrust Subcommittee grilled the CEOs of Alphabet, Amazon, Apple and Facebook -- four of the country’s five most valuable companies, with only Microsoft missing -- on a wide range of matters. The CEOs dialed in through videoconference, while most of the committee members were present in Congress, where Chairman David Cicilline, D-R.I., repeatedly reminded them to wear masks to prevent the spread of Covid-19.

Combination photos of Mark Zuckerberg, Sundar Pichai, Tim Cook, Jeff Bezos

Source: CNBC

Seems like Facebook is getting the biggest hit and reasonably so, considering that they are like a news media firm where information is power and politicians wants to have as much influence on media as much as possible.

US Markets closing higher with Nasdaq and Russell

US markets closed higher for the day and Russell 2000 is the highest gainer for the day with 2.10%. Nasdaq was the next best performer with 1.35%.

If you remember my previous post, I mentioned about the Financial and Energy sector which they had a good run as well especially with Bank of America, JP Morgan and Energy companies like Exxon, Chervon and BP.

Will share more insight on these two sectors soon!

Apple’s China iPhone sales jump 225% in the second quarter as recovery continues

News Flash:

Apple was the fastest-growing smartphone maker in China in the second quarter, bucking the overall decline in the world’s second-largest economy, according to research data.

The sell-through volume for iPhones in China was 7.4 million units in the April to June quarter, a 32% growth year-on-year, according to Counterpoint Research. Sell-through refers to iPhones that go to Apple’s retail partners and is a close gauge to actual sales to consumers.

In comparison, Chinese phone maker Huawei saw sell-through volumes of 36.6 million units, or up 14% compared to a year ago. Apple sells significantly fewer phones than Huawei in China.

Source: CNBC

Singapore Airlines reports S$1.12 billion net loss in Q1

Used to be one of Singapore's crown jewel, its share prices is really going down the drain due to COVID-19 and it doesn't seem to look like it is going to recover anytime soon looking at the airline industries all halting almost more than 90% of their primary activity which is flying.

Revenue for the group plunged 79.3 per cent year-on-year to S$851 million in the first quarter ended Jun 30, while expenditure dropped 51.6 per cent to S$1.89 billion.

Overall passenger carriage fell 99.5 per cent - 99.4 per cent for Singapore Airlines, 99.8 per cent for SilkAir and 99.9 per cent for Scoot.

Source: Channel NewsAsia

Looking at its weekly chart (skipping the daily one for now), it does not seem to show any signs of recovery and I do not think one should try to buy any rebound at this point in time. It is now at its all time low and likely going lower with no means to really determine where is the bottom. We will need to look at the other sources like pharma companies on their capabilities to push out the vaccine to see a potential recovery in SIA.

In terms of going down and out, I would think it may not be the case as it has Temasek holdings as its backing and recently issued rights to secure more funding to stay afloat. Worst case scenario might be to nationalize SIA which may allow it to avoid public scrutiny. SMRT back then was a good example of such an approach.

SIA Weekly

China’s Tencent is now bigger than Facebook after adding around $200 billion to its value this year

Latest news from CNBC:

Tencent’s market capitalization has surpassed Facebook’s following a huge rally in the Chinese firm’s shares this year.

The gaming and social media giant’s market cap stood at 5.15 trillion Hong Kong dollars ($664.50 billion) at around 3:07 p.m. Singapore time. Meanwhile, Facebook’s market cap totaled $656.15 billion as of Tuesday’s close.

Tencent shares have rallied around 43% year-to-date, compared to just over 12% for Facebook. That has added around 1.53 trillion Hong Kong dollars ($197.74 billion) onto Tencent’s value.

Source: CNBC

Interesting to see how it goes from here as alot of the big banks has Tencent's target price above 600.

Disclaimer: Whatever posted here is purely my personal view. It is not an inducement to trade and not responsible for any losses. Tips and News might just be rumors in the market. I take no responsibility for any gains or losses as a result of reading my analyses, judgement and opinions. Trade with care and diligence please!

Hang Seng Tech Index closing positive for today

Today the Hang Seng Tech Index closed positive however looking at the constituent stocks, the top 4 companies didn't do so well and it was really held up by Hua Hong Semi (1347.HK) +13.3% and SMIC (0981.HK) +8.74%.

If the heavy weighted constituent companies are not doing well despite the Index being up, we will need to be cautious to see where the market is trending.

Below is courtesy from AAstocks:

Hang Seng Tech Index

In case if anyone is interested in the list of companies that form the index below is the link and it shows the Index as well:

http://www.aastocks.com/en/stocks/market/index/hk-index-con.aspx?index=HSTECH&t=1&hk=0&s=5&o=0

Half the day is gone and half of the constituent companies are down currently and US futures are also down as well. With the Big 4 tech going to the antitrust hearing this week, it will be interesting to see what the impact would be on Nasdaq and S&P 500 (the big 4 tech companies are part of S&P if you are not aware and the weightage is pretty big as well).

Disclaimer: Whatever posted here is purely my personal view. It is not an inducement to trade and not responsible for any losses. Tips and News might just be rumors in the market. I take no responsibility for any gains or losses as a result of reading my analyses, judgement and opinions. Trade with care and diligence please!

Xiaomi (1810.HK)

Being one of the Hang Seng Tech Index, its constituent weighting is at 8.11%, ranking at #4.

Xiaomi Corporation is a Chinese electronics company founded in April 2010 and headquartered in Beijing. Xiaomi makes and invests in smartphones, mobile apps, laptops, bags, earphones, shoes, fitness bands, and many other products.

Looking at the daily chart, it is definitely not pretty and it seems to be forming a lower high and lower low. However, looking at the weekly chart, if it holds within the long green bar that was formed on week of 6 July, it would likely be positive and poise for a potential move.

It seems more volatile compared to Tencent and Alibaba as it has a big presence in India and due to the border tensions, it may get more price volatility in the short term until the governments sort out their differences.

*I currently hold Xiaomi shares.

1810.HK Daily

1810.HK Weekly

Selling in Nasdaq and Russell

Markets were down generally during US hours and we will see that Tech is broadly down again yesterday with the Big Tech (Apple, Google, Microsoft, Amazon) and the crown jewel of US, Tesla.

With Nasdaq down by 1.27%, it is expected the Hang Seng Tech Index will likely take a hit as well today.

However, if you look at the other sectors, Financials were not that bad with most of the Big Banks getting a small gain with the exception of Morgan Stanley. Energy sector however is getting a hit with most of the big oil companies like Exxon, BP, Chervon falling around 1-2%.

It is likely to see volatility this week as earning season starts so watch out!

Disclaimer: Whatever posted here is purely my personal view. It is not an inducement to trade and not responsible for any losses. Tips and News might just be rumors in the market. I take no responsibility for any gains or losses as a result of reading my analyses, judgement and opinions. Trade with care and diligence please!

Alibaba (9988.HK and BABA SW)

Sharing some view on Alibaba which is listed in both US and Hong Kong, it is also part of the Hong Kong Tech Index where it is around 8.53% of the index.

Looking at the daily and weekly chart in US, it would seem like it is now consolidating in a big range, possibly reversing in a downward trend but will need to monitor how it goes for the next few days. Looking at the weekly chart, as long as it does not close below 234.19 it would be a good bullish signal.

One thing to note as per what was shared earlier, Alibaba like Tencent is also getting the hit from the India Government due to the border tensions so we will need to monitor that situation closely. Also as Alibaba is listed in US and with the US government hitting chinese companies hard and fast, Alibaba being one of the more prominent companies would likely get the (unwanted) attention.

*I currently hold 9988.HK and the reason why I chose that is because its firstly cheaper to own in Hong Kong and being in Asia it will be easier to monitor the stock as well since both are somewhat mirroring in terms of movement. Also considering there might be a possibility that Alibaba may just list in Hong Kong in the future due to the US China tension, funds may flow back to HK which may push the prices higher.

BABA Daily

BABA Weekly

Sharing also the HK charts although it is quite similar in nature.

9988.HK Daily

9988.HK Weekly

Joseph Yam: Worried About 3rd Financial Crisis Brewing

Former HKMA Chief Executive Joseph Yam, in an interview, expressed his concern that the third financial crisis may already be in the womb of time, as woes brought by previous financial crises remain unresolved. However, the US Fed and central banks worldwide continue to adopt quantitative easing and inject more funds into the economies.

Seeing huge debt, high deficit and no deposits in the United States, Yam is worried over a sharp USD downturn, rather than depreciation pressure on HKD.

Source: http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1030558/popular-news

Another item to take note is the rise in Corona virus in Hong Kong which the city state has been swift in its action to close many activities but noting the potential impact to the economy again...

Looking beyond Tech and Gold

I will be sharing some views on 2 specific sectors that are underperforming and may have a good opportunity for an upward move. Currently as we can see, Tech and precious metals like Gold and Silver are leading the way in the markets and mainstream media so it would not be good to chase high prices in case of picking up what the big boys may dump.

2 sectors that I am looking at currently is energy and financials which both are lagging behind.

Tencent Holdings (0700.HK)

Key summary on TCH (0700.HK) -

As part of the new Hang Seng Tech Index, Tencent makes up 8.52% of the new Tech Index and Tencent Holdings operates through the following segments: Value-Added Services, FinTech and Business Services, Online Advertising, and Others. The Value-added Services segment involves online and mobile games, community value-added services, and applications across various Internet and mobile platforms. The FinTech and Business Services segment provides fintech and cloud services, which include commissions from payment, wealth management and other services. The Online Advertising segment represents display based and performance based advertisements. The Other segment consists of trademark licensing, software development services, software sales, and other services.

Looking at the daily chart, it looks like it is consolidating with the lower range at $516 and currently just above its 20MA. Looking a the weekly chart, although it has made its parabolic move up to the highs of $565, we are seeing some form of consolidation within the top range. If this continues to consolidate, it might see a higher price movement depending on the broader market trend especially when Nasdaq moves.

One thing to take note though is the tension between India and China even though Mainstream media has always been covering the tension between US and China. India is also a big market for some of the big C-Tech (i call it China Tech) firms like Alibaba, Tencent, Xiaomi and the border tensions has recently made the India Government take some drastic moves against the chinese companies. We will need to continue to monitor the situation to see how things unfold.

*I currently hold Tencent shares

Details of Tencent via AAStocks: http://www.aastocks.com/en/stocks/quote/detail-quote.aspx?symbol=00700

Tencent Daily

Tencent Weekly

Analyst target price (courtesy of Tiger Brokers application)

While the focus is on equities...

On the other side of things, gold and silver has made tremendous runs over the past 2 weeks and the run has been parabolic.

One should not chase these two precious metals at this moment and should wait for pullbacks to find a good entry.

Looking at gold, the consolidation has been taking place since April and recent breakout has made a tremendous 9.63%. Looking at Gold futures which is currently trading at 1929 and the massive news coverage on Gold, it is likely to push higher for the next few days due to retailers joining in and likely due for a pullback but I don't expect it to tank considering the latest news on the 1 trillion bailout package that the US government is trying to lobby. If that happens, expect Gold to make even more parabolic moves as many central governments will look to get physical gold to back their currencies.

GLD Daily

GLD Weekly

Looking at the Silver chart, it has also made diabolic moves recently and it is really relentless in its up move. I will share more insights once I go through some of the news/charts as I have not really been following Silver but if Gold moves, all the other precious metals will naturally tag along as well.

SLV Daily

SLV Weekly

My analysis of Facebook

Below is the daily chart of FB and it seems to be consolidating since 26 May within the range of $244.76 and $224.20 as per the Fibonacci retracement. A consolidation might be a sign of uptrend considering at the moment there's some distribution of funds from tech to other sectors.

It's worthwhile to take note
- for the moment that the entry for FB might be good between $218 and $224 which there is a gap fill.
- it is now trending below 50MA and will need to see how it closes this week.

*I do not own any FB shares currently.

Key point to note: It is not about how the stock prices open but more importantly how it closes for the day and week.

Key notes over the weekend:

Looking at the Hong Kong market, Monday will be the start of the new Hang Seng Tech Index and judging from the price action movement in Nasdaq over the last 1 week, the index might not start well however Nasdaq seem to recovered slightly on Friday and major Nasdaq components (Apple, Amazon) and semi conductors (Nvidia) recovered from its intraday lows. Its weekly chart is still in an overbought state and probability of retracting is higher.

Will look to cover the following next week in lieu of the HSTI on ATMX:
- Alibaba
- Tencent
- Meituan
- Xiaomi

Nasdaq Daily:

Nasdaq Weekly:

Key notes on Microsoft:

Microsoft revenue grew 13% despite coronavirus and here’s how the company did:

Earnings: $1.46 per share, adjusted, vs. $1.34 per share as expected by analysts, according to Refinitiv.

Revenue: $38.03 billion, vs. $36.50 billion as expected by analysts, according to Refinitiv.

However, looking at the charts, it shows a different picture where it was sold down from its highs. Using the Fibonacci as a guide, it hit its 138.2% mark and seems like it is unable to break through. Based on yesterday's close it is now below its 123.6% mark which we will need to see the weekly close to determine if it will retract back to $191.35.

*I do not own any MSFT shares currently.

Hong Kong to launch Hang Seng Tech Index.

This is mirroring the US Nasdaq where the top 30 tech stocks in HSI will be part of this Hang Seng Tech Index.

This will be launched from 27 July onwards and it will be interesting to see how this will mirror the US Nasdaq movements.

Some of the most valuable Chinese Internet companies as its constituents includes Alibaba Group Holding (9988.HK), Tencent Holdings (0700.HK), Meituan Dianping (3690.HK) and Xiaomi (1810.HK).

More details in the link below: http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1029097/popular-news

My view on Apple:

It has been a significant run for Apple since the February highs and March lows and relentlessly moving up to its all time high at $399.82, which is close to the $400 psychological mark.

Using the Fibonacci indicator as a guideline, it was close to its 161.8% mark and started to retrace back to the 150% mark. If it starts to consolidate at this range, it might position itself for a higher up move. Looking at the recent market moves in Nasdaq, the consolidation range might be touching $371 which is at the 138.2% mark.

Long term trend is still up.

* I do not own any Apple shares currently.

Key notes:

Markets seems to be volatile after options expiration from last Friday. Nasdaq has shown strength during the opening hours and start to sell down throughout the day.

Stocks to take note:

- Apple

- Microsoft

- Facebook

will share the charts and see whether there is any good entry point.

It's been a while since a new post... and will look to share some thoughts on the markets since COVID-19 has engulfed the world for the past 6 months.

Key Lessons

Rule number one: Don’t lose money. Rule number two: Don’t forget rule number one.
It is not about how the stock prices open but more importantly how it closes for the day and week.
When people are greedy, its time to be fearful. When people are fearful, its time to be greedy.
The trend is your friend till the end.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.
When the semiconductors fail, you better bail.