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| Wednesday, October 31, 2007 |
| advSCT, Tat Hong, Okp |
Price weakness recently presented a buying opportunity.
For advSCT, I was right and wrong in my suggested support. I initially thought that it would be very well supported at $1.01 since it surged from that point. However, I guess it is very well supported at $1.07 or $1.08 region. I've thus loaded my second tier at $1.07 today bringing the average to around $1.04. This is done using my CFD account.
For OKP, this is more for trading purposes. It is supporting well at around $0.78. Price weaknesses are seen but they are hovering steadily this prices. It is recovering well recently. I bought some at $0.805 and $0.79. This brought the average to about $0.80. This is done using my CFD account. At the moment, my CFD account is a little bit stretched, even though overall portfolio risk is still within limits.
For TatHong, I bought small lots at $2.98. This is one counter that escaped right before my eyes. If you have followed my brother's blog, he is an investor in TatHong since $1.20. In fact, I have been telling him that I will load the counter but it never realized. Up till recently, I told him at $2.50 that it is a very resilient counter judging from its trading activity. And coupled with the times and sales analysis, it hinted that the pressing down of prices was intended. BUT the thing is, why did I not buy it? Well, at that moment, I wanted to focus on 4 main stocks. Yes, being more focused will allow me to reduce transaction fees. But is that ideal? For a technical trader, a lot depends on being able to invest in counters that has potential to show movement. If that is the case, why haven't I done it recently?
I came to realize that it is difficult to fuse two schools of thoughts together. On one hand, I want to sit on a good counter, but on the other, I want to ride on the good waves. So what should I do? Maybe 4 counters is too little for a technical trader. If there are things I should do, I should
1) Create a better filtering system for counters that might have a good run. This will be first screened by TA, followed by a brief FA, which gives assurance that this company is decent. Notice that I used the word decent. Because in reality, stocks don't necessarily move according to proper valuations. It is usually affected by macro economics and sentiments and of course the business fundamentals. And thus at times, one will see that macro events and sentiments take over. So this IS an opportunity for technical traders.
2) Find the best fit of number of counters. It is difficult to maintain seriously. If you looked at past posts, I have been struggling to find the best fit for a looooooooooong time. In the past, I trade fully on technicals. I can't say that I didn't work, as I am able to unearth counters like StraitsAsia, Cosco (at 1.70 before the gave bonus shares), Capitaland, CAO (1.17), FerroChina (1.95), BH Global (0.38), KepT&T (1.41), GoldenAgri (1.40 before the share issue or split). Not to mention OKP (at 0.54? I can't remember), Rotary, TiongWoon, which gave me good returns.
But what I failed in is the management of counters. While I sold on the counter on technical weakness, should I buy then on technical strength? Counters that show good increase are bound to have significant technical weaknesses. So should I actually follow this counter till the long term trend breaks? Maybe this would be better. But then comes financial constraint. It is not effective for me to do technical short as my positions are quite small. Then again, it boils down to good management, which I think I still lack
Ideally, TA can unearth running stocks while FA can discover the potential. Maybe that would be a good way to start trading/investing.Labels: advSCT, OKP, TatHong |
posted by Nenix @ 10:58 AM   |
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| Tuesday, October 30, 2007 |
| Importance of risk management |
I was reading through the Anwell thread in Share Investor forum, when I came across this new guy who vested a huge amount, using contra, based on a forummer's advise. He mentioned that he was a newbie and that he previously had burnt his fingers on uniAsia. Mentioned its all or nothing for his holdings.
Two things to bear in mind, if you are new, don't contra. Contra is difficult as you need good timing as well. While you might be right about 70% of the time, all it takes is one bad week, and most of the earnings will go "poof".
Second, don't listen for tips. While there might be genuine people, there might also be crocodiles. Always follow your own rationale for buying, that is unless your rationale is to follow tips. :) |
| posted by Nenix @ 8:03 AM |
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| Sunday, October 28, 2007 |
| Actions for 29th October 2007 to 2nd November 2007 |
The following will be actions I might be taking this week. One thing that I felt that I should take note is the if a 3rd tier is being loaded, it must be a significantly lower value than the 2nd tier. Furthermore, I realize that it is actually quite difficult to buy once you see the rebound because more often than not, the rebound is certain only a day after the bottom. Because I trade based on End-Of-Day (EOD) data, I will only load on the following day, in which it will be higher.
Anyway, below will be the course of actions for this week. I feel that by doing this, it gives me more sanity as I won't be tempted to make rash decisions. For the course of actions, I will not touch on my long term counters, which are MMP Reit, STI ETF and Gld 10$US. (Note that the gold investment is not that sound as it based on US currency, which is losing value . Furthermore, the amount I got is not big enough to hedge it with forex. So I will liquidate it if I could top it up with STI or MMP)
CFD:
AdvSCT-
Course of Actions (29th October 2007 to 2nd November 2007) - 1. Price drop to $1.01 --> Top up using CFD as second Tier
- 1. Price increase to $1.25 this week --> Sell for profit taking
- 2. Price drop to $0.985 --> Top up using CFD for third Tier
- 3. Price drop to $0.950 --> A sharp cut in EMA and with sharp drop in MFI and MACD would trigger a sell (Can't quantify it as of now)
- 3. EMA cut down trigger --> Will sell regardless of loss (This is my fundamental cut loss trigger)
Cash:
AsiaEnv-
Course of Action (29th October 2007 to 2nd November 2007) - 1. As the EMA cut is gentle in nature, it does not necessarily mean that its a down trend, it just signifies the continual of consolidation. A price of $0.65 will cause the Tier 4 (CFD) to be loaded.
- 1. A price of $0.80 by this week will warrant some profit taking
- 2. A price of $0.635 will trigger a cut loss signal
PacAndes-
Course of Action (29th October 2007 to 2nd November 2007) - 1. Price of $0.78 will warrant a buy order for third and final tier
- 1. Profit taking will take place if it hits $0.87 this week
- 2. EMA cut is not an issue. The reason is the same as in asiaEnv
- 2. Sell trigger at $0.765
ChinaAOil- Course of Action (29th October 2007 to 2nd November 2007) - 1. Profit take partially if prices exceed $3.14 by this week
- 2. Trigger loss is at $2.55
- 2. Exit on sharp EMA Triggers
FerroChina-
Course of Action (29th October 2007 to 2nd November 2007) - 1. Profit taking if it exceeds $2.90 by this week
- 2. Exit positions on sharp EMA triggers
- 2. Trigger loss at $2.30
MiddleEastD-
Course of Action (29th October 2007 to 2nd November 2007) - 1. No profit taking as position held is too low
- 1. Loading of second tier will be reconsidered if EMA crosses positively. It is not confirmed as this is not one of my focused counters.
- 2. Exit positions on sharp EMA triggers
- 2. Trigger loss at $0.19
Boustead-
Course of Action (29th October 2007 to 2nd November 2007) - 1. No profit taking as position held is too low
- 2. Exit positions on sharp EMA triggers
- 2. Trigger loss not accurate due to low volume
Lyxor China H-
Course of Action (29th October 2007 to 2nd November 2007) - 1. No profit taking as position held is too low
- 2. Exit positions on sharp EMA triggers
- 2. Trigger loss at $22.86
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| posted by Nenix @ 8:11 PM |
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| Friday, October 26, 2007 |
| 26th October 2007 update |
This is the last week of October and I have loaded my positions on Wed, which I believed is the low of the consolidation. Though I am wrong on this, I feel that my entry is well justified with indicators showing a highly probable event of rebounding.
I still have around 13% cash, of which it will be used for my third tier of counters or for shorter term tradings. Right now, I need more confirmation of recovery of some oil and gas counters, in particular, Tiongwoon, before loading it. For such counters, there will not be a different tiered system and loading should be one time only. Of cos, that should be put aside for the moment. This month really has been quite a wonderful month in terms of knowledge and experience gained. I learned to have a scenario analysis table to guide me so that I won't make impulse decisions. Right now, though I am disciplined in cutting losses, sometimes, I just cut without thinking. haha.. Fear sometimes get to my head when there is a sea of red. But with scenario analyisis, events will be played in my head so I know how to react etc. In terms of performance, it is actually quite bad as I failed miserably to catch up with STI benchmark. So I will be working on that soon. Maybe next week will be an interesting week. Maybe if rates were not cut, we would see another wave of red. That, in my opinion, would be interesting. Labels: NenixDreams Fund |
| posted by Nenix @ 9:31 PM |
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| Thursday, October 25, 2007 |
| Stunning statistic |
I was updating my holdings, something which I do without fail, when suddenly, I am curious about my realized hit rate this year. This applies to only realized profits and losses. Just this year alone, I realized 92 transactions (this is inclusive of accumulative buys. Eg, if I bought in 3 batches, even though I sold in one batch, it is considered as 3 batches in my record).
The result is as follows:
92 attempts
59 fail
33 pass
which equates to 35% hit rate.
If this is school, I would have been retained.
However, my profits rose more than 40% during this period.
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Whats the moral of the story?
It DOESN'T MATTER how many times you are RIGHT.
What matters is HOW RIGHT YOU ARE when you are RIGHT and
HOW WRONG you are when you are WRONG.
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| posted by Nenix @ 8:53 PM |
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| Technical updates on holdings |
I'm still not good at fundamentals, thus I shall skip this portion till I know some stuff about it. Looking at the markets today, it seemed a bit weird. SSE dropped 4+% but HS and STI rose. More importantly, my S-shares seem to be rebounding off their lows. One possible deduction is that people in China are taking profits and investing in H-Shares and S-shares. Mid-cap holdings like CAO and FerroChina had significant increase in volume today (+40%).
However, this does not mean that everything is fine . I feel even after the rate cut decision, the markets will be choppy till year end. Something like 3 steps forward, 2 steps back kind of scenario.
Anyway, below are brief updates on my counters.
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AsiaEnv - selling pressure exhausted. This is shown by the small volume traded today. All set for a reversal.
AdvSCT - buyers and sellers fighting it out. Despite the hype from forummers in SI, I feel that it will show weakness soon. As this is bought using CFD, risk is higher, and thus, buying should be done in short term downtrends.
Boustead - buyers trying push down the price and sellers trying to push up the price. It's tough accumulating this counter and I have no idea why volume dried up. Don't tell me all retail investors are fundamentalists.. haha... Man.. if thats the case, everyone will hold and we wont see price increase.. haha..
ChinaAOil - As predicted, it seems to have rebounded off the bottom of 2.6 to a region of around 2.70. Increased volume today might indicate that people are collecting the counter. "Every dog has its day"and maybe the day will come sooner than I expected.
FerroChina - $2.44 seems to be relatively good level as it indicates a rebound AND it is on the 26d EMA. Of cos , EMA can be set with different settings and if you use a longer period, $2.40 should already be a good point to buy. All these indicators are guides. Although my trading system revolves around EMA rules, sometimes, it is difficult to judge as the cut might be very minute (more on this when I'm free).
Gold - A not so good investment on my part due to weakening dollar (yes, the currency for the gold stock is in USD). At the moment, chart looks kinda tricky as it seems a bit too Bear. This is my long term investment and I guess unless I am in need of cash, this investment won't be encashed
Lyxor China H - volatile at the moment. Currently still on a healthy intermediate uptrend.
MiddleEast - hoping to load in Tier 2 positions at $0.19 but it held strongly at $0.2. Today's rise was unexpected as I did not expect the consolidation to end so soon.
MMP - I told my brother that I will be pouncing at $1.14 and I was almost there. MMP is a safe stock to leverage on due to its small movement. This means that rewards per risk is very good. It is very well supported at $1.21 to $1.22 that one could capitalize on market panic to load the shares. Anyway, I missed the boat at $1.16 but still holding to my current batch. This is part of my long term investments so shouldn't be bothered by it.
PacAndes - Consolidation still evident and more time might be needed. No problem at the moment
STI ETF - a good example portraying the volatility of the market. Just for long term.. wonder what happens to this counter when the new index kicks in.
Tomorrow might be a profit taking day and I hope that I might get some advSCT :)
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| posted by Nenix @ 7:39 PM |
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| Wednesday, October 24, 2007 |
| Actions I took on 24th October 2007 |
Below is the summary of the course of actions for today. This is taken from the previous post. To all readers, I know at the moment, this is a bit disorganized and I will sort this Scenario Analysis out in the future. Anyway, to make a brief explanation of the steps, step 1 signifies the possible scenarios that might happen and my course of action. Step 2 is a level deeper than that and etc. I wanted to write out a documentation for it but due to lack of time, I feel this is the best method to remind myself not to make impulsive buys (My ideal of documentation will have valuation based on surface technicals and fundamentals, with a more detailed analysis of both schools in part 2, followed by the course of actions [This step is important as I tend to be impulsive in both buying and selling]) Anyway, the actions I took will be in blue fonts. And the red wordings are comments of my actions
Cash: AsiaEnv-
Course of Action (23rd October 2007 to 26th October 2007)
1. A price queue of $0.68 would be pushing it. Depends on sentiment, if Dow closes badly, will queue at $0.67 (maximum 6 bids regulation), else will queue at $0.685-$0.69 for my Tier 3.
*Tier 3 is loaded at 0.695. Not exactly to plan though. $0.695 based on sentiment today, is a good price. However, should I be more patient with my third tier? Maybe I should, but now what I'm left is the ultra short term Tier 4, which is powered by CFD.
1. A price of $0.78 by this week will warrant some profit taking
2. As the EMA cut is gentle in nature, it does not necessarily mean that its a down trend, it just signifies the continual of consolidation. A price of $0.65 will cause the Tier 4 (CFD) to be loaded.
2. A price of $0.635 will trigger a cut loss signal
PacAndes-
Course of Action (23rd October 2007 to 26th October 2007)
1. Depending on the close of Dow today, a gain in Dow would mean that the buying price will be $0.805. if Dow don't do well, I could actually try $0.795
*Tier 2 loaded at $0.81. As mentioned, this is a good price to enter based on sentiment today. If you try to understand how the market reacts, sometimes good sentiments will drive the prices up. Sentiment is definitely a catalyst.
1. Surge in price will not warrant a profit taking as I only have 1 portion of shares
2. EMA cut is not an isse. The reason is the same as in asiaEnv
2. Price of $0.785 will warrant a buy order for third and final tier
ChinaAOil-
Course of Action (23rd Octboer 2007 to 26th October 2007)
1. Buy at around $2.7 for tier 2
1. Don't buy at any price higher than $2.72 as consolidation might be stretched
*Queued at $2.72, which I manage to buy in the end
2. Trigger loss is at $2.55
2. No profit taking as current holding is a first tier stock
FerroChina-
Course of Action (23rd October 2007 to 27th Octover 2007)
1. Buy 2nd Tier at most $2.44 only. Will not pay more as of 23rd October
*Bought at $2.44. Maybe at a high price, but prices have reached the bottom already.
1. No profit taking as I do not have many holdings
2. Smooth cutting of EMA is not indicative of a down trend. Unable to tell if its smooth at the moment but will cut if its an abrupt drop and it cuts EMAs
3. Tier three buying would have to be funded by sales of other counters but this scenario will happen if EMA smoothens. Price to buy will be around $2.30Labels: AsiaEnv, ChinaAviationOil, FerroChina, PacAndes |
| posted by Nenix @ 9:46 AM |
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| Tuesday, October 23, 2007 |
| Actions I might take tomorrow |
What if it rebounds slightly?
So what happpens if prices rebounds slightly today? A weak increase which do not cover the gap would mean that confidence is still not here yet. If it happens, wait. Remember after hitting the bottom, prices will consolidate. So rather buy at a higher price with positive technical indicators than lower price with too many unknown factors.
Today rebounded slightly, so I shall look at my holdings in particular
CFD:
AdvSCT-
Chart Analysis
- Today's the price patterns show that buying sentiment is not strong enough to push.
- Increasing volume seem more promising though
- Momentum has dried for the moment as MACD is rather flat
- MFI has shown a decline
Verdict
It has been going on strongly for the past few days and while overall indicators are still promising, we are experiencing a bit of a pullback. Most probably mild and it won't be surprising if it drops back to $1.02 by end of the week.
Course of Actions (23rd October 2007 to 26th October 2007)
- 1. Price drop to $1.01 --> Top up using CFD as second Tier
- 1. Price increase to $1.20 this week --> Sell for profit taking
- 2. Price drop to $0.985 --> Top up using CFD for third Tier
- 3. Price drop to $0.950 --> A sharp cut in EMA and with sharp drop in MFI and MACD would trigger a sell (Can't quantify it as of now)
- 3. EMA cut down trigger --> Will sell regardless of loss (This is my fundamental cut loss trigger)
Cash:
AsiaEnv-
Chart Analysis
- Price charts promising as of yesterday's rebound. Signify that selling power is rather weak
- Decreasing volume on a down trend shows that the selling is decreasing. This signifies that a change in trend is possible
- MFI looks poised for a rebound
- 26d EMA and 12dEMA are closing in showing either a possible down trend or bounce off support, though the latter is more likely due to other supporting indicators
- MACD however, still shows weakness and has not shown any recovery
Verdict Most indicators shows that consolidation period is coming to an end, with the exception of the MACD indicators. Tomorrow will be a good day to buy. Course of Action (23rd October 2007 to 26th October 2007) - 1. A price queue of $0.68 would be pushing it. Depends on sentiment, if Dow closes badly, will queue at $0.67 (maximum 6 bids regulation), else will queue at $0.685-$0.69 for my Tier 3.
- 1. A price of $0.78 by this week will warrant some profit taking
- 2. As the EMA cut is gentle in nature, it does not necessarily mean that its a down trend, it just signifies the continual of consolidation. A price of $0.65 will cause the Tier 4 (CFD) to be loaded.
- 2. A price of $0.635 will trigger a cut loss signal
PacAndes-
Chart Analysis
- Strong rebound indicates that selling pressure has hit its limits.
- Similar to AsiaEnv, which I have been comparing to recently, volume decreases with down trend signifies a consolidation of a bull run
- Remarkably, the all indicators with the exception of MFI is similar to AsiaEnv
- MFI has rebounded instead of showing potential signs of rebounding.
Verdict
Rebounding strongly, and showing decreasing selling pressure, it all points to a good rebound. Will buy tomorrow.
Course of Action (23rd October 2007 to 26th October 2007)
- 1. Depending on the close of Dow today, a gain in Dow would mean that the buying price will be $0.805. if Dow don't do well, I could actually try $0.795
- 1. Surge in price will not warrant a profit taking as I only have 1 portion of shares
- 2. EMA cut is not an isse. The reason is the same as in asiaEnv
- 2. Price of $0.785 will warrant a buy order for third and final tier
ChinaAOil-
Chart Analysis - Decreasing volume with decreasing price means consolidation in bull run
- Sellers are decreasing
- Volatility is decreasing
- MFI shows a reversal
- MACD doesn't indicate a reversal
Verdict Might be a good price to buy. However, not as confident as asiaEnv and pacAndes. This is a pricey stock and I do not have enough for three tiers. Will queue at the support though Course of Action (23rd Octboer 2007 to 26th October 2007) - 1. Buy at around $2.7 for tier 2
- 1. Don't buy at any price higher than $2.72 as consolidation might be stretched
- 2. Trigger loss is at $2.55
- 2. No profit taking as current holding is a first tier stock
FerroChina-
Chart Analysis
- Weak recovery today. Little conviction to push up the price
- Decreasing volume with price means that it is undergoing consolidation
- MACD doesnt show indication of any reversal
- MFI has bounced of it "low" though
Verdict
Similar to CAO, this is showing some form of consolidation. This unlike CAO, seems fake. Gapped down trades 3 days ago brought to me that the seller might be trying to push for more selling. The least convincing among my other counters. I will be queuing but I wont be getting any at a premium as of now. I wouldn't mind buying higher if a reversal in trend is confirmed
Course of Action (23rd October 2007 to 27th Octover 2007)
- 1. Buy 2nd Tier at most $2.44 only. Will not pay more as of 23rd October
- 1. No profit taking as I do not have many holdings
- 2. Smooth cutting of EMA is not indicative of a down trend. Unable to tell if its smooth at the moment but will cut if its an abrupt drop and it cuts EMAs
- 3. Tier three buying would have to be funded by sales of other counters but this scenario will happen if EMA smoothens. Price to buy will be around $2.30
Labels: advSCT, AsiaEnv, ChinaAviationOil, FerroChina, PacAndes |
| posted by Nenix @ 7:58 PM |
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| Market Commentary |
To first be able to decide your entry, you must ask yourself this question, what is your time horizon for trade/investment?
If its 2 to 3 days, then this morning was a good time to enter.
If its for weeks, (catching intermediate trends), then its still not recovering as of now.
If its for long term, maybe it doesn't matter.
What the market now might be just a rebound. Is this sustainable? I am not sure. A lot depends on the closing today, to reaffirm if yesterday was the bottom of bear run recently. While I have loaded the counters for the longer term (I'm still learning fundamentals, but judging from trading behavior, I can quite confidently say that it will go up), the timing to load for trend capturing is still not here yet. One day of rebound does not mean much and from recent experiences, we know that for the majority of the counters, prices don't just reverse its trend in one day. It will most certainly consolidate for awhile. People need time to get the big picture.
So what happens if prices rebounds strongly today (100pts)?
It will be an indication that yesterdays doji-ish candlestick is the last of selling pressure. It will be an indication to pick off the bottom. However, bottom picking is risky, and thus its not really suggested to go in at too high a price.
So what happpens if prices rebounds slightly today?
A weak increase which do not cover the gap would mean that confidence is still not here yet. If it happens, wait. Remember after hitting the bottom, prices will consolidate. So rather buy at a higher price with positive technical indicators than lower price with too many unknown factors.
So what happens if it goes down slightly?
Market is still weak an this might not be a reversal. Further evidence to wait. This result will make me make my decision much better. As there will be no dilemma.
So what happens if it goes down by quite a bit?
Same as above, I'll just wait for timing.
From the 4 options, the most tricky scenario is when it closes strongly. However, this is just a tracking on market sentiment, and there are "people" who made use of these counters to press it down, so it doesn't mean a lot actually. If you follow Elliot Waves, it is said (from forums) that we are still too early for a down trend.
But just a note on my style, I am not here to bottom pick, because I know I'm not good at it. What I want is to ride the trends. Make some money, and try not to lose much. I have always believed that trend riding is the most direct way to make money. However, I am now taking more risk in using fundamentals. It's not that its risky, but the risk of getting your money stuck when you have better investments would be a problem. Nonetheless, its still better to trade with trends with fundamental basis. At least this will have better insurance. |
| posted by Nenix @ 12:07 PM |
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| Monday, October 22, 2007 |
| This is why I can't be an intraday trader |
This is just a reflections post. I remember in the past, lets say February, I cut counters that are still ok, while it helped in that I have capital to buy low, I made unnecssary trades. Forward it to August, I practically did the same thing. And forward it to October, I did similar things too. But one starking similarity is that I made unplanned decisions. This has been a bane for me so far, and it is a tough path to train myself. But currently, I am doing that, and it is a totally different feeling.
I am holding paper losses to most of my counters. I have enough cash to re-enter trades. I don't look at the counters so frequent today. In my mind now, I have scenarios going on in when to take a cost average, when to cut. This is something I have never really put to practise and you know, for the first time, I am feeling damn neutral about the correction. In fact I see a grin on my face when I see the prices fall. I am waiting to use my Opportunity funds to top up current positions or to take advantage of weakness. And all these could be done by following this rule.
DONT MAKE DECISIONS ON INTRADAY BASIS.
This is what I gathered from experience and I know from my ability that I suck at intraday. Maybe this is because too many things can happen at the same time and as I hold more counters, I get confused. Decision making should be done at end day. This is how my system is planned.
Right now, FerroChina is near my cutloss but I did tell myself that I have a "tier 2" fund readied to average it when it shows reversals. Same goes for AsiaEnv, PacAndes, CAO, with some for advSCT, OKP, Rotary and TW. The latter are mostly to capitalise on weakness and I will tread carefully not to fall into the trap again of buying too many counters.
It will be an interesting week I tell you and imagine the repercussions if the FED don't cut their rates. That is something I have to think about. |
| posted by Nenix @ 1:33 PM |
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| Singapore's version of Black Monday? |
We will see lots of panic selling tomorrow. Prices will go down once again. If you ask me, I will say, it wont even hit the prices of counter 2 weeks of the bottom. There are a few reasons to put it across.
Firstly, we are still not far away from the recent crash. People have memory and thus short term players will be flushed out due to fear, long term players will be cautious but understand that not much has changed in the macroeconomic area.
Secondly, people now anticipate this fall tomorrow and though it will be lots of selling, we would understand that there will be people who will pick bargains. What price will be good? As I mentioned, it won't go as far down and support will be found at the recovery zones (approx 2 weeks after bottom).
Thirdly, for S-shares, this will be a good time for those foreign to push the price of good stocks even further so that they could get at a good entry level. One example might be FerroChina. Judging for the times and sales, 251 lots were done at opening. This doesn't look like contra covering as contra covering would be done at most 3 bids below yesterday's close. No adverse news on the previous day further reaffirms the decision that it might be institutional hands.
We look further in and ask ourself, what did they do it?
IF the company is rotten, they would have sold slowly, which might earn them more bucks. The fact that they did this could be down to these reasons.
A) They want it cheap
B) They shorted the counter
Either way is similar as they might have anticipated the bad run in DJ and increasing oil prices and other issues, resulting them to short the counter.
I am a believer of option A though. Foreign funds are coming and pleeeeeease, they wouldn't be so dumb to buy indiscriminately. While I do not have a clear picture on how the buying process works (Determined by a group of many small investors or a small group of large investors), I do understand that most China stocks with the exception of YZJ have been showing weakness. In fact, if market does badly, S-shares will be even better supported. And with China showing more chances of correcting, they might invest more in these funds. This will only do good to our S-shares.
Hah. Anyway, I have deviated from my topic of discussion. I feel tomorrow will fall bad, with little recovery. The worst will most probably be over by Friday, and we would see mild drops till the FOMC meeting. Bargain buying could be done on Wed or Thurs although we must keep in mind that rates might not be cut.
I have re-orged my shares for the third time this year, and according to my bro, its a bit too much. And I fully agree. I have lots of struggle between adopting a 100% trend following system and having earlier profit taking in my system. I have thus decided to incorporate some fundamental analysis so as to filter out the trending stocks with least potential. If there are 10 trending stocks and I have to choose 1, it might eventually be down to the fundamentals of the company. Of cos, I will have a systematic approach to that, and I will try to make it as quantitative as possible.
Anyway, cheers for the week |
| posted by Nenix @ 2:02 AM |
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| Saturday, October 20, 2007 |
| A potential Merger! |
Seems like there might be a merger of funds! If you look at this blog http://melynn-lynch.blogspot.com, you will realize that he is an aspiring hardcore fundamental analyst. Even the blog link sounds fundamental. haha. For me on the other hand, while I have made quite a fair bit of mistakes, many in fact, my research is basely more on portfolio management, risk allocation, and some half past six technical analysis.
For my handling of my funds, I have realized that though TA tells you which direction it will go, it does not tell you how far it will go. This is especially true for a trend follower like me. However, with FA factored into the analysis, it will provide more depth on how far it can go.
At the point of typing, I am really excited by the prospect because this is something we have never done before. There will be lots of beneficial points from this merge.
A) More funds makes the approach easier as we could hold larger positions. We could now think of how to maintain the base of our holdings and take profits at the same time. It will be more cost efficient now as we have more power.
B) Two extreme schools of thought will be beneficial. Even though both of us are quite raw in our
trade, we believe that constant learning will improve our the odds of having a big runner.
However, lots of administrative work is needed at the moment
1) The standard operating procedure of analysis and asset allocation
2) Scenario analysis
3) How to approach disputes with peace.
My my my, this is so exciting. However, both of us have not gone through a crash/recession, so we do not know if we could really handle that. Furthermore, it is always likely that my TA or his FA will pull the fund down. Anyway, Asset Allocation is the main key to success and we feel that if this is ironed out, the probability will swing to our favor. Maybe if time allows, we will set a combined blog that tracks our holdings. Watch that space if that happens then!Labels: NenixDreams Fund |
| posted by Nenix @ 11:19 PM |
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| Friday, October 19, 2007 |
| 19th October update |
Before I begin, I have tweaked my beta version of my trading system. Some of the distinct changes
1. Each position will be allocated a larger portion of risk as compared to the previous version.
2. Screening process will be and much stringent. This includes The long term trend direction, short term trend direction, momentum of short term trend.
3. Decision to buy based on the price it is in and it is divided into several tiers.
Tier 1: trying to get into position.
Tier 2: trying to buy at short term weakness
Tier 3: trying to bottom fish
Tier 4: using CFD when it has rebounded from long term weakness short term down trend
4. Decision to cut loss is still the same. However, I'm still deciding if the Tier entry should follow the same cut loss degree.
5. Decision to profit take. While trend following still applies, due to larger positions, I could actually stagger profit taking. Tier 2 and Tier 3 could be used for profit taking as these funds are used to bottom fish in the market. From experience, a correction always comes when one gets too carried away with purchasing stocks. Thus, profit taking is important so as to keep more free cash in your portfolio.
6. Decision to exit. Similar to previous version of the trading system, the time to exit will be exhitbited by the EMA. True enough, the loss incurred due to some cost averaging is high, but the risk of not exiting is even higher. Furthermore, there might not be too much loss, as it is cost averaged at tier 3.
Generally, these are the principles for the system and at the moment, I am currently employing this system. I have loaded 3 core equities in pac Andes, FerroChina, AsiaEnv and ChinaAOil. These 4 counters are already loaded in Tier one, with AsiaEnv being loading with the second tier counters. I have still funds to load the 3rd tier of AsiaEnv, 2nd tier of CAO and FerroChina. However, I would also want to wait for opportunities to load on the counters that are battered hard at the moment. Loading a tier 3 for short term is a good idea though.
I will be blogging again soon if I could find the time. Recent activities have taken quite a hit on my portfolio, dropping back to $1.48. Will see it drop down to as low as $1.40.Labels: NenixDreams Fund |
| posted by Nenix @ 11:51 PM |
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| Thursday, October 18, 2007 |
| Correction not over but... |
Alright, it was a mistake bailing out of CAO and FerroChina as both did not hit the trigger. However, while I was lucky with FerroChina, which I bought at lower price, I wasn't as lucky with CAO.
Loaded small positions on AsiaEnv @ 0.715, PacAndes @ 0.835 and CAO @ 2.89.
Not very good prices but these are only the first batches.
FOMC is on 31st October, China facing a possible pullback at the moment, Bombay having issues with their own exchanges. Thus as a result, there is no hurry to load positions as there will be more downside in the short term. The reason I loaded those is more of staking claim to a position first as it is still more probable to see the price at year end higher than the prices which I bought.
We have approximately 2 weeks before the rate cut. If DJ surges till the meeting, any decision other than a rate cut will cause a correction in DJ, and from STI's trading pattern, we would definitely follow in a more magnified scale.
However, if DJ were to go down mildly for the next few weeks, STI would most probably trade sideways, but while DJ will still go down if there is no cut, STI might have been near its bottom already.
Furthermore, with China showing a possible correction now, what we need is some cooling off before we could see the continual of the next run.
In fact, next two weeks will be as choppy as the past few days. If you ask me what are my plans, it is to free up cash and wait to get some counters on the cheap, which is what I'm doing, despite being not that effective.Labels: AsiaEnv, ChinaAviationOil, PacAndes |
| posted by Nenix @ 1:18 PM |
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| Wednesday, October 17, 2007 |
| Drawbacks of Technical Analysis |
While I pride upon myself for being a 100% pure technical trader with disregard to fundamentals, I do face a few problems during my trading experience. To begin talking about the drawbacks of TA, I would like to first critique on my own unpolished Trading System.
Critique on my system
Problem 1: One of the issues is the fact that I might enter and exit a counter too late. Although this was my intention as all I want is to capture the meat of the trend, but sometimes, when price shocks occur, it will hit my indicators, as a result, selling at a low. So right now, what I did was not against my system. However, if you look at how EMAs work, once the counter increases in value for some time, the EMAs will diverge so much that it will take a big drop to cut the EMA. That is the main problem in my opinion.
Potential Remedy:
When to buy: I will now purchase my counters in 3 batches. First is the recognition of the trend. Second will be when the price goes below the first support line. Third will be when the price reaches the third support line. One advantage is that I will have bargain buys in times of price shocks.
When to cutloss: This is a bit tricky as most of the time, it will coincide with the buying signal. In the recent past, I said that I shouldn't use cost averaging as it is "unfair" for the good positions but if I adopt this remedy, I will have use cost averaging. The cut loss should then be at the level if it is under the lowest EMA for x number of days.
When to profit take: This will be a new idea because once I accumulated enough, I should profit take on the excessive positions. To profit take maybe once it shows signs of consolidation. Profit taking could also be done on 3 stages, with the last stage signifying the closing of the position.
What to buy: The positions are larger, thus it is impossible to adopt my current strategy. Maybe a glance at fundamental data would be desired.
Verdict: The idea here is to capitalize on the trend till it actually breaks. Profit taking will reduce profits if it runs, but it will definitely allows one to stay in the trend longer as capital is present to cost average it. Furthermore, this might offset huge divergence of EMAs. The general idea is to sell 2/3 (assuming that accumulation is complete) once the shortest EMA is showing tiredness, buy 1/3 at the 2nd EMA line, and the last 1/3 at the 3rd EMA line or if the 1st line shows recovery. Yup, the system will be something like that.
In reality, I guess there will be situation whereby I will have 1/3 remaining after which I will top up another 1/3 at a higher price. This leaves the final third as free flowing cash flow. That is why the 1/3 will always be there till it actually breaks.
Drawback of TA
One of the main drawbacks is that while knowing technical analysis will set you up in the right direction, it doesn't really have much mechanisms that will determine the maximum upside of the counter. With this, it is kinda difficult to ride the trend as it will come to a point in time whereby you have lots of trends showing good signs. Like I mentioned, I am confident my system will have profits but my aim shouldn't be just profits, it should at least beat the local index. Right now, while I am able to keep downside at a minimum, I have no idea how to predict the upside.
Seems like I have no choice but to check out the fundamentals of the company. Luckily my brother will be able to help me out. It is interesting to note that while he is predominantly FA, I am predominantly TA. And at the moment, he has much better returns than I am, so I guess he must be doing the right things. I think if both of us learn faster and be good at what we are doing at the moment, then the million dollar dream will not be so far off!Labels: NenixDreams Fund |
| posted by Nenix @ 10:11 PM |
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| Good recovery but.. |
Good recovery, but we should still be cautious. Even if it was a price shock yesterday, one shouldn't take off the fact that the market is currently very weak. Our market at the moment is reluctant to move. For today, I hesitated reentering CAO at 2.61. I think I won't be able to get at such a price, but CAO will consolidate. In fact, very seldom do you see stocks still continuing its course after one day of sharp fall.
My strategy is to keep more cash available at the moment and wait for the dust to settle. To me, what is most important is capital preservation. Today, I have loaded some FerroChina @ 2.57 and I will relook the situation tonight to see if I will load in some positions tomorrow. Most importantly, I need to have cash to ready myself. Furthermore, I will now limit my holdings to at most 7, excluding MMP, STI ETF and Gold.
P.S This reminded me of the dead cat bounce few months back and I think I will be more vigilant this time round.Labels: FerroChina |
| posted by Nenix @ 4:39 PM |
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| Tuesday, October 16, 2007 |
| Correction and beyond? |
"All in all, as we observe that many counters are facing consolidation, it is safe to say that broad based correction is likely. "
Seems like I was spot on. While only a few had hit my EP, I've decided to clear my trading positions. I believe that macro conditions do play an important role, with the rocketing oil prices, China inflationary bubble waiting to burst, US inflation/subprime issues still lingering, it seems that at this point of time, if 3 of these issues were to pop, or bull run, if any, will be pushed back. At the moment, I'm neither bear nor bull, put I feel that safe guarding the capital is more important. No matter what, the market wont run away and there will always be opportunities to invest/trade. But without capital, or if capital is stuck, you can do nothing about it.
To me, there is a difference between broad based correction and dips in individual counters. With broad based correction, every good news will have little or no effect. It's like trying to go against the wave. For inidvidual dips, we look at the consolidation and surge of inidividual counters. At this moment, as the macro sentiment might change suddenly, the TA for individual stocks have to be cast aside.
Right now, the more sensible thing is to try to find the bottom with small positions. After which, when the dust settles, then consolidate your holdings for the next run. That is if there is a correction. However, if there isn't then just enter the positions again. Transaction fees are the costs of keeping the integrity of you capital.
Anyway. with the exception of MiddleEastD, I have cleared all my trading positions.
Rotary @ 1.38
OKP @ 0.82
Ferrochina @ 2.64
Wheelock @ 2.66
Soilbuild @ 1.34
advSCT @ 0.96
CAO @ 2.79
AsiaEnv @ 0.69
TiongWoon @ 1.08
Federal @ 0.81
FJBen @ 0.88
Swissco @ 1.34
After selling those, my fund price dropped to $1.49 while the market just retracecd 2cents to $1.58. I am now $0.09 behind the market. Anyway, now that I'm sidelined and full of cash, I could start to cherry pick. I will most prob load up on CAO, Ferrochina, maybe Tathong, TW, and OKP once it goes lower. We shall see how it goes tomorrowLabels: advSCT, AsiaEnv, ChinaAviationOil, Federal, FerroChina, FJBen, OKP, Rotary, Soilbuild, Swissco, TiongWoon, Wheelock |
| posted by Nenix @ 7:01 PM |
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| CFD FuJianZY |
Sold my holdings at $0.715. This is the first time that my trigger has hit so quickly. Based on cost, I incurred a 61.34% loss. Ouch.
What I might have did wrongly is that I have overinvested in CFD. If you all have followed my postings, you will know my struggle to cope with the mechanics of CFD. Following trend has its disadvantage as its not easy to sell.
I have an idea which I thought about. While the cash account should be used for position trading, CFD should be done based on cash generation. In this aspect, I should have profit taking on these counters. Maybe this is the lesson that I have to learn from this loss.Labels: CFD, FuJianZY |
| posted by Nenix @ 3:23 PM |
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| CFD OKP Profit taking |
| Profit take on OKP at 0.845. Not neccessary but wanted to generate cash flow for my CFD account. After deducting the transaction costs, my positions have a 3.03% profit from cost. Labels: CFD, OKP |
| posted by Nenix @ 12:45 PM |
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| Food for thought |
| Once upon a time, in a village a man appeared who announced to the villagers that he would buy monkeys for $10. The villagers seeing thatthere were many monkeys went out in the forest and started catching them.The man bought thousands at $10 and as supply started to diminish andvillagers started to stop their effort he announced that now he would buy at $20. This renewed the efforts of the villagers and they startedcatching moneys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so that it was an effort to even see a monkey let alone catch it. The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business his assistant would now buy on behalf of the man. In the absence of the man, the assistant told the villagers "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when the man comes back, you can sell it to him for $50." The villager squeezed up with all their saving to buy the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere! Labels: NenixDreams Fund |
| posted by Nenix @ 12:14 PM |
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| Monday, October 15, 2007 |
| Technical Update on my Portfolio |
Haha.. I'm a bit embarrassed by my large portfolio. Anyway, I do not have the opportunity to reduce my portfolio. Maybe, this week, I might hit some of the triggers, which will give me reason to either cut loss or profit take. Anyway, this is a technical update on my counters. Note that the month of October is historically bad, so sentiment is not optimistic. Furthermore, with the FOMC meeting around the corner, most investors will be on the sidelines. Profit taking should not be seen as abnormal.
AdvSCT
- Overbought region in the MFI indicates that some time is needed for consolidation
- Low volume reinforces the fact that most are waiting on the sidelines
- Parabolic SAR indicates a downtrend at the moment
- MACD indicates that the upward momentum as ended and it might swing downwards. Extent of downward swing cannot be determined
- Narrowing price range indicates that consolidation period is ending.
Verdict: Direction points towards consolidation which is understandable but consolidation might end earlier than expected. Most indicators point towards a quiet week for advSCT.
AsiaEnv
- MFI indicates consoliation
- MACD indicates that upward momentum is nearing an end/has ended
- Decreasing volume with decreasing price indicates consolidation
- Support at $0.725 is weak and will test $0.66 if broken.
Verdict: This is a severely traded stock and TA could be taken out of the window. From insider trades, our respectable UBS trades frequently around 3000 lots. From past few days, we saw one lotters pressing down the price. We can see where these big boys are going, pressing it down, then pushing it up, selling to ignorant people, then pressing it down again. Well, what we can do is to hold on and not panic. But on technical terms, consolidation has just started.
Boustead
- Consolidation for about 2 weeks already
- Reaching oversold region
Verdict: The is the exact opposite of AsiaEnv. It is so illiquid that no one knows how to play it. Prices should move soon and for illiquid stocks we will see faster price surges. Nothing to worry about this counter.
ChinaAOil
- Going through a mild consolidation
- Nothing to be worried as it is on a positive uptrend.
Verdict: Ride and ennjoy the wave before it is too late.
Federal
- Recovering from consolidation
- MFI hits 50% mark
Verdict: Good time to enter now as it might be the start of the next short term uptrend
FerroChina
- Consolidation seems to be ending soon
- Price surge is very likely within the next 3 days
Verdict: Similar to CAO, just be patient and ride the wave.
FJBen
- Sudden weakness in price indicates that it might not be just a simple consolidation.
- Caution needed if one is to trade this counter
Verict: Be cautious on this counter despite its uptrend. Sentiments are not reacting naturally to this counter
FuJian
- In consolidation stage
- Decreasing volume suggests that this is consolidation in a bull run
- MACD showing selling momentum. Whether it is significant is still unknown.
Verdict: Be patient if you haven't entered the counter. Wait till Friday before loading the counters
Gold
- Uptrend
- Consolidation period has ended
Verdict: Long term counter. Just hold.
Lyxor China H
- Uptrend
Verdict: Just ride the wave as it looks like it still has lots of upside potential
MiddleEast
- Selldown should be a concern
- Consolidation is coming to an end. Direction of price movement will be significant in 1 to 2 weeks time.
Verdict: The long consolidation has reached its end, and the direction of the next move is dependent on the breakout.
MMP Reit
- Sideway traded
- Not much interest in buying up although it is very well supported.
- Such scenario will not last long as more people will try to make use of this scenario, making it non profitable. When that time comes, it has to go one direction, which is upwards
Verdict: Keep for long term, as it is more of a yield stock.
OKP
- Consolidation period ended earlier than expected
- Might be going on another run.
Verdict: Be careful though as indicators show that it is slightly stretched.
Rotary
- Broke down the 80% level of the MFI. Indication points to it being overbought.
- Consolidation will end this week unless major macro-economic issues kick in.
Verdict: Buy on dips as consolidation period will not last long.
Soilbuild
-Consolidation period just began
Verdict: Could buy on dips, but better to wait for better trend formation.
STI ETF
- Showing signs of stretching
- The highs don't seem to be sustainable
Verdict: Consolidation would be natural progression and it wont be surprised if we have a small consolidation/correction.
Swissco
- An unexpected end to consolidation
- Might have pending news or events that affects the sentiments positively.
Verdict: Ride the trend as usual
TiongWoon
- Trading sideways for some time already
- Consolidation period at the moment
Verdict: Consolidation is necessary for the trend to move. Be patient
Wheelock
- Conosolidation period is ending soon
- Property development counters are under radar at the moment and once they are noticed, the price will recover fast
Verdict: Cautiously optimistic about this counter.
All in all, as we observe that many counters are facing consolidation, it is safe to say that broad based correction is likely. If you have counters before the index recovered, then I guess it would still be relatively safe to hold it. For me, my EPs are stated and I will stick to it.Labels: advSCT, AsiaEnv, Boustead, ChinaAviationOil, Federal, FerroChina, FJBen, FuJianZY, Gld10US$, LyxorChinaH, MiddleEastD, MMPReit, OKP, Rotary, Soilbuild, STI ETF100, Swissco, TiongWoon, Wheelock |
| posted by Nenix @ 8:48 PM |
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| Cut loss strategies for 14th October 2007 to18th October 2007 |
Risky Stocks
FuJianZY - EP: 0.715
MiddleEast - EP: 0.205
Gold - Exit price(EP): 64.4325 (Long term investment)
Moderate Risk Stocks
ChinaAOil - EP: 2.60 - "Zero Risk"
AsiaEnv - EP: 0.7
Swissco - EP: 1.21
TiongWoon - EP: 1.00 - "Zero Risk"
OKP - EP: 0.765 - "Zero Risk"
FerroChina - EP: 2.42 - "Zero Risk"
Rotary - EP: 1.30
Federal - EP: 0.730 - "Zero Risk"
Lyxor H China - EP: 22.71 - "Zero Risk"
Low Risk stocks
Wheelock - EP: 2.62
Soilbuild - EP: 1.30
FJBen - EP: 0.82
MMP - EP: 1.12 - Comments: Not selling as it is for the longer term
STI ETF - EP: 37.79 - "Zero Risk" - Comments: not Selling as it is for the longer term.
Boustead - EP: 2.31
AdvSCT - EP: 0.925
As I would like to say, this exit system is a dynamics one and it changes daily. So this table here just shows a guideline for the entire week. I will not be uploading updates for cut losses daily as more often than not, it wont fluctuate very wildly.Labels: NenixDreams Fund |
| posted by Nenix @ 12:32 AM |
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| Position Trading vs Swing Trading |
Position trading is more on trading on the position, which is practically what I'm doing now. There are many ways of position trading. Some examples are EMA and band trading. EMAs are basically trend trading as they show you the trend. Long when it is going up and short when it is going down. A simple theory and concept but not many can grasp it. Band trading works differently though. They trade basely on support and resistance and believe in counter trends. Basically, they trade on the rebounds.
Swing trading on the other hand is more focused on trading on the momentum. Usually, it is very short term. I feel this is more for cash generation. I'm not entirely sure how to do it effeciently but I will be reading up on it.
Just food for thought, I think I do need cash generation so that I would have more cash in hand. CFD perfectly fits the bill due to its nature of financial charges. I might be considering this, but one thing for sure is that I won't exit too frequently as I need to prepare my trading style such that it will not affect my fulltime job when I graduate from university.Labels: NenixDreams Fund |
| posted by Nenix @ 12:07 AM |
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| Friday, October 12, 2007 |
| 12th October update |
This week is rather mixed for me. Overall has dropped from $1.56 to $1.55. Market correction seems possible though, but anything more than that seems unlikely. If you ask me, on hindsight, I felt that I invested too early. I knew from technical indicators that a consolidation is possible for OKP, advSCT, asiaEnv, pacAndes. Thats why I sold advSCT, some asiaEnv, pacAndes. Basically, I cleared my CFDs. Then when market corrected down, I tried to bargain pick these counters. Initially, I queued OKP for 80cents, advSCT at 995, asiaenv at 0.775. But I was afraid that I couldn't get it, so I used cash to get advSCT and asiaEnv, thinking that since it is for the longer time horizon, it should be ok to get it soon. For OKP. i changed at the last minute to get at 825. Oh well, I feel there isn't much wrong in my decision though. This week has been shaky, having lots of whipsawed movements. How I read this is that stocks are exchanging hands, and it is more geared towards accumulation by funds. At the moment, after the correction, I think funds have lots of cash at hand and by default, they need to be in the market. Thus, they might be loading in positions now. Generally, things are looking sweet at the moment. A last note of caution, we are almost halfway through the historically bad month of October and the year end rally is near. If we follow historical trends, then I will have to say that my fund will not go below $1.50 till the correction next year! Anyway, the decision on whether to cut the fed rates in two weeks time will be the catalyst for either the year end rally, or stagnant growth till end year. Labels: NenixDreams Fund |
| posted by Nenix @ 9:34 PM |
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| Thursday, October 11, 2007 |
| Round of yesterday's Action |
CFD
Sold MMP @ 1.21
Bought FuJianZY @ 0.83
Bought FuJianZY @ 0.815
Bought FuJianZY @ 0.785
Bought OKP @ 0.825
Bought advSCT @ 0.995
Cash
Bought AsiaEnv @ 0.78
Bought advSCT @ 1.01
Today might continue to fall and hopefully, none of my triggers are hit.
Anyway, I took a look at FuJianZY's times and sales. Lots of 1 lotters pressing the price down. Maybe instituitions are pushing the price down? Maybe the funds from China come in batches, accumulating when they are low and distributing to the retailers like us? Anyway, this is just a small pullback in my opinion. At the moment the market is trading sideways with upward bias. If you sell and buy again next time, more often than not, you will sell at a lower than peak price and buy at a higher than trough price. With the inclusion of transaction fees, one might as well just hold through the storm.
Anyway, markets are unpredictable, and despite the fact that I said that this is only a passing cloud (passing correction), things could change easily and I have my triggers to safeguard my positions.Labels: advSCT, AsiaEnv, FuJianZY, OKP |
| posted by Nenix @ 1:53 AM |
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| Wednesday, October 10, 2007 |
| MMP Reit (CFD) |
| Well, opportunity came by for me to correct my mistake of loading MMPReit. Sold at 1.21 which is at a profit of 4.167% with respect to the cost. I think after deducting transaction costs, it will be about 2.833% with respect to cost. Cost is significant because of the selling off at just 1 bid difference. Labels: MMPReit |
| posted by Nenix @ 3:08 PM |
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| FuJianZY |
This is the first time I've loaded on a counter without must historical charts to back me up. Loaded at $0.83 using CFD. While speculative in nature, there are some points to note. MACD seems to have resumed to build up momentum. Although it is in the overbought zone, it does have potential as it started trading during the subprime correction. CFDs are tricky in the sense that holding it for too long will erode profits due to fees and the nature of trend following will erode profits further. Primary target will be $0.92 which I will review again.
*Off topic Remark*
I do realise that while holding a position does give better returns in the long run, trading short term will generate cashflow, which is important at the current state (student in need of more cash). CFD will be the excellent platform to trade as it is more hasslefree than cash trading.Labels: FuJianZY |
| posted by Nenix @ 9:39 AM |
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| Consolidating counters |
Like I said in the previous post, I am consolidating my counters to about 12. In this post, I will state those that are maxed and thus not possible to load in new positions.
CAO has relatively high risk rating and although I am holding a relatively small position, the risk far outweighs it and by calculation, I am full with this counter.
FerroChina has relatively high risk as well, and I am full with this counter.
Wheelock has least risk but I am holding too high a position for this. In fact, I overloaded as it exceeded my risk limit.
Slowly, I will consolidate my counteres if possible and will update when I do consolidateLabels: ChinaAviationOil, FerroChina, Wheelock |
| posted by Nenix @ 7:39 AM |
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| Tuesday, October 09, 2007 |
| MiddleEastD |
| This stock has gone up and down like the humps of a camel. I have profited once from this counter and currently, I am holding it at $0.22. Today's correction of the price to $0.235 looks like a good opportunity to load up. This stock, despite its high volatility, it does have a steady uptrend . However, one thing to note is that things could always change and my cutloss should be very nimble. The average cost now is approximately $0.2275 Labels: MiddleEastD |
| posted by Nenix @ 6:20 PM |
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| CFD Clearance move |
I really don't know what gotten into me, but I closed my positions for advSCT, AsiaEnv, PacAndes.
AdvSCT was cost averaged at $0.9725 and sold at $1.02. Because you only need to pay 1/5 of the total cost, my percentage gain based on that position is approximately 24.42%.
AsiaEnv was cost averaged at $0.67875 and it was sold at $0.765. Percentage gain based on that position is approximately 12.707%.
PacAndes was bought at $0.73 and it was sold at $0.835. Percentage gain based on that position is approximately 14.383%
Bought MMP Reit at $1.20 today. My rationale at the time was to make sure that I can capitalise on the capital returns in a month's time or park it aside while waiting for oppurtunities to come. I knew that MMP Reit is a stable stock that doesn't move much so downside risk is quite limited. But the same goes for its upside potential. Furthermore, parking it like that does incur needless charges. I see this move as a big mistake, firstly, because I bought on impulse thinking that it is a bargain, and secondly, while it is a bargain, the transaction costs would have eroded all returns. I will give myself 1 month before I close this postion.
On the whole, while I profited from today's trade, I understand that I did not follow the rules I set. Partly because fear set in as CFD is a double-edged sword. Afterall, I'm still very interested in these counters and I will most probably be coming back for 1 of them when the prices are correcting, which they most probably are now.Labels: advSCT, AsiaEnv, MMPReit, PacAndes |
| posted by Nenix @ 5:57 PM |
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| October Spook |
Historically, October is a bad month for stocks, although last year seemed ok. As markets are driven by perceptions of traders, concerted thoughts that October is a bad month will often lead to a correction. However, I still maintain my stance that we have already seen the worst of the correction (bear in mind that I don't predict that accurately), most speculators are very badly wounded during that period and for the inexperienced, they should be licking their wounds now. The money in the market now consists of mainly experienced traders, do-nothing investors, new entrants. Of cos, there will be also newbies like me who didn't suffer collosal damage and still in the market, but this proportion should be small compared to the others.
The significance of this proportion is that panic selling will be limited, or should we say, the floor should be found rather quickly. This is of course an indication to probably buy on dips.
If it does correct, it will be an opportunity to increase my holdings in some positions.Labels: Random thoughts |
| posted by Nenix @ 7:38 AM |
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| Monday, October 08, 2007 |
| Triggered |
As stated in my previous posts, the selldown trigger for CWT is $1.22. However, upon hitting the trigger, I sold it at $1.20. Is this due to impatience that I sold it at the low of $1.20? Maybe, but I have been patient for long enough and it has undoubtedly hit my trigger.
My Returns for this counter has been relatively good, with a 25.65% for the position size. Now, I shall move on to consolidate my positions. Seems like it will be another shaky week (which once again proves that my prediction sucks). So now might be a good time to consolidate my counters so that I have fewer counters. Labels: CWT |
| posted by Nenix @ 5:13 PM |
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| Saturday, October 06, 2007 |
| 5th October Update |
This week was just ok for me. Didn't manage to beat the market as we are both level at 56% mark. But I know this is a long term game and I know that patience is important. Besides, the trends of most of my counters are kicking in and it's just a matter of time I see the rewards.
One significant change to my portfolio is the introduction of Wheelock. As you can see, it holds the largest percentage in my portfolio. There are a few reasons for this.
1) Wheelock is at the lower band of the moderate risk segment (3.17). This means that fluctuation is limited and thus indicates that taking on a larger position will be rather safe.
2) I am trying to trim the total number of stocks (excluding those in CFD) to about 10 to 15. This basically means that I will be taking more risk per position held. While I can save more on transaction fees, it also means that I might end up losing more. It's a balance that I found it very difficult to achieve, on whether to focus on cost cutting (transaction fees), risk incurred (potential losses for holdings) or profits (potential profits for holdings). Anyway, to reduce the number of positions, I could only start by adopting a larger position for subsequent stocks.
3) Property market are lagging at the moment possibly due to the focus on S-shares. People will start noticing it soon once the S-share craze has settled down. Wheelock recently exhibited uptrend and it still way below the price before the correction (The correction of property is way before the recent meltdown due to implementation of higher development charges) Below is the summary for the risks of my holdings and the cutloss price for Monday.
Risky Stocks
Gold - Exit price(EP): 60.55 - Comments: Not selling though as it is a long term holdings MiddleEast - EP: 0.205
Moderate Risk Stocks
AsiaEnv - EP: 0.675 ChinaAOil - EP: 2.50 FerroChina - EP: 2.38 - "Zero Risk" (This means that cut loss point is higher than purchase price, thus implying a guaranteed profit in adverse conditions) TiongWoon - EP: 1.03 - "Zero Risk" Swissco - EP: 1.23 PacAndes - EP: 0.755 CWT - EP: 1.11 - "Zero Risk" Rotary - EP: 1.30 OKP - EP: 0.775 - "Zero Risk" AdvSCT - EP: 0.925 - "Zero Risk" Federal - EP: 0.785 - "Zero Risk" Wheelock - EP: 2.55
Low Risk stocks
Soilbuild - EP: 1.30 Lyxor H China - EP: 20.96 - "Zero Risk" FJBen - EP: 0.84 - "Zero Risk" MMP - EP: 1.14 - Comments: Not selling as it is for the longer term Boustead - EP: 2.30 STI ETF - EP: 36.785 - "Zero Risk" - Comments: not Selling as it is for the longer term.
Please note that this EP is dynamic and it is changing everyday depending on the market conditions. This mechanism is to protect myself from drastic price shocks. However, if there are no price shocks, the only time whereby I will exit a position is when the trend bend. While this might not be as profitable as other strategies, it will at least ensure that I am earning profits.
Labels: NenixDreams Fund |
| posted by Nenix @ 2:27 AM |
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| Friday, October 05, 2007 |
| Low Volume again |
As of now, the volume is rather low. Not much activity going on. It is quite a directionless day. People seems to be on the sidelines unsure whether to profit take or to hold. On one hand, there is the China influx of liquidity which will impact us on a domestic scale, while on the other, we see weak economic data in the Western part of the world. We aren't confident of our own market and most probably waiting for China's holiday to end. More and more factors seem to affect our market. HS indicators, DJ indicators, SSE indicators, STI indicators, and maybe Nikkei indicators. Indicators in this sense of the word includes economic data, macro news as well. So whether our market goes up depends on how we weigh the seriousness of the situation.
I have a feeling that come Monday, if DJ closes positive, and SSE surges, we will see the continuation of the run. |
| posted by Nenix @ 2:39 PM |
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| Thursday, October 04, 2007 |
| That's why I said don't predict |
http://nenixdreams.blogspot.com/2007/10/brief-summary-of-some-counters.html
Lol. Seems like it's really the case. Buying based on prediction surely isn't the way to go. News releases are so random and reason for HangSeng's fall might be due to regulations on simultaneous listings in both Mainland China and Hong Kong. Who would have expected this news?
Singapore as usual, is spooked by their actions and everyone just sells off. At least for today, at low volume, we see some recovery. Yesterdays trading shows that not many are spooked and those that sold off are those contra risk takers (If they know what they are doing, their cutloss will be pretty tight due to the risk they are taking).
In conclusion, price charts should be use as a guidance to plot your next move (follow trend) and not act as some form prediction (blindly using predifined chart patterns). There is a difference between predictive TA and ermm hindsight TA (cant think of better word. haha)?
P.S. All methods, if you know what you are doing are profitable, so I'm not bashing methods |
| posted by Nenix @ 11:42 AM |
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| Wednesday, October 03, 2007 |
| Brief summary of some counters |
In the com lab doing revision, but felt like blogging out my thoughts.
The craze of the injection is slowly settling down. And some of the more "performing" counters last week are seeing some signs of consolidation. Like what I posted in the summary, some of what I mentioned came true!.. (smirk look on face)
Don't if I mentioned but predictions are just for fun as it doesn't fit into my style of trading. Anyway, from price now (wednesday, 2:16pm), I decided to see if my predictions came true. "Check" means according to plan, "Cross" means not according to plan.
AdvSCT: check
AsiaEnv: cross (though trading range decreased, but at that point of time of predicting, it was more of sideways trading. Furthermore, this is a stock which I follow my bro, so I didn't want to do much analysis on it. Got caught in the first "fake" breakout though, so its a bad trade all in all)
Boustead: check (well, not exactly accurate but its slowly moving and so far it didn't hold above 2.45. Dubious check)
CAO: Check (It did surge )
CWT: Check (consolidating now)
Federal: Check (Its slowing down)
FerroChina: Check (Continued to surge, and it did test 2.87. Maybe I'm not that accurate since I said 2.88. Oh well, still have 2 more days to go though)
FJ: Check (Price still increases)
Gold: Cross (Its consolidating now, though maybe I'm right in the sense that the price irregularity did affect the charts. But that doesn't really make sense as I can't really link them together)
Hiap Seng: Check (Cut loss did trigger)
Lyxor H: Check (still surging like no one else's business)
MiddleEast: Check (uptrend is there and its supporting above 0.235)
MMP: Check (This is easy. Its trading sideways for like ages)
OKP: Check (Consolidating in sight)
PacAndes: Check (Consolidation ended, hovering around 0.86)
Rotary: Cross (Momentum not as bad as I thought)
Soilbuild: Check (Slow uptrend, momentum picking up)
STI: Dont bother
Swissco: Check (Didn't explain much, so guess its check.)
TiongWoon: Check(It did surge and it looks like its consolidating too! Wow.. I'm a genius!)
17 checks, 3 crosses, 1 don't bother. Haha. See, not that tough to predict right? Anyway, don't take this seriously. I'm just trying to boost my ego for awhile cos I can't solve my Maths problems. haha. Will do a more serious analysis during the weekend. |
| posted by Nenix @ 2:11 PM |
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| Quality Screening! |
As a trend follower, it gets kinda boring once you have your system done out. My system is done up, although its not yet robust as I still have to manually sell/buy my stocks. I still have to manually update the prices and the risks. Haha, I'm just not savvy enough despite the fact I'm from Computing. So all I do is to post my thoughts and just see if it works out.
So now we witness liquidity into our little RedDot. Although it affects primarily selected China stocks, we have seen obscene surges in practically every stock that has either China or Sino in it.
Question to ask. So who pumps in all these money?
1) The new investors from China?
2) Local punters?
Lets zoom in to analyze option 1. They have money and they according to wiki, they cant have more than 5% of a particular stock. So what will they do? Maybe they might just buy everything they can. This might just be possible. Again, this is a guess, and don't trade based on my opinions. I'm a newbie so don't blame me for losses. :) Anyway, fundhouses are mainly fundamental in nature, which might imply that even though they might just go for speculative counters, in the end, the focus is still on quality counters. My take is that new investors pumps in the money into the quality China stocks. In fact they might have invested in it already, which brings to the second point, local punters.
They listen to news, speculate, rinse and repeat. Usually, this group of people get rich fast but are also the first group to go broke. And thankfully, they have injected lots of liquidity. If they burnt their fingers in the process, they just have to work harder and then contribute to the market.
Anyway, I'm feeling sleepy and this should be the last post till my weekly update. Need to revise for tests (school work)). In a nutshell, liquidity is added from both sides and we can see that there are more funds available than stocks. Next few days we shall see the dragons and the kittens. Good stocks will surge and the rest will lose money .
Good luck all... really slpy now.. Nitez to all |
| posted by Nenix @ 2:38 AM |
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| Tuesday, October 02, 2007 |
| HiapSeng |
Today, the trend reverses and i have to sell it at $0.84. As I bought at $0.855, it is around -1.754%. Including transaction fees it will be approximately -3%
Maybe when it reverses, I will buy it back
Labels: HiapSeng |
| posted by Nenix @ 10:53 PM |
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| "China Funds" is a good catalyst |
The injection of funds from China to China stocks in Singapore is good news. In fact judging from yesterday's price movement, everything surged upwards, even for non-related stocks. The market will find its level once the dust settles and yesterday should be considered a "price shock". While I have no system to manage positive price shocks, we should try to understand that price shocks are just price shocks.
How do you determine a price shock? In my opinion, it is when most of the stocks in the market move dramatically in one direction. So according to this definition, yesterday was a price shock. Price shocks more often than not act as a catalyst to push the better stocks.
Assuming that price shock is negative, fear will set in to those who don't know to sell. This action will cause a big drop in prices.
IF the stock is in the hands of fundamentalists, the drop would be less drastic, while if the stock is in the hands of speculators only, we would see crazy movement in prices. For a trend follower, we should try to filter out the "speculator's shares" from the "fundamentalist's shares". I'm not intelligent enough to scrutinize a stock's fundamentals carefully so my only bet is to find out whether is it in good hands through such patterns. Not really TA in my opinion but more of looking at human behavior. And looking back at my recent buys, all of them are stocks which recovered quickly. The "speculator's shares" on the other hand will most probably spiral down.
Lets take a look at the positive price shock. Everything goes up nice and pretty. But sooner or later, market will balance it out. One possible method (untested though) is to scan the percentage of retracement from yesterday's close. If a stock is good, fundamentalists will still come in and fundamentalists in the counter might not sell (or at least not sell everything). Retracement, as a result, wont be drastic because not many are willing to sell. However, if a stock has lots of traders inside (very speculative counter), what we will see is profit taking, and from human nature, most would be satisfied with a gain rather than a chance of having a loss. To summarize, people would just sell 3-5 bids (assuming most are small traders and thus significant transaction fees) above yesterday's close. Those are the stocks that should be avoided (for now, at least).
A look at my CFD account has PacAndes, AsiaEnv, AdvSCT.
For PacAndes, in SI forum, i stated that consolidation is nearly at an end.
For AdvSCT, I just bought because of a change in trend.
For AsiaEnv, I got faked into the first surge (bought at high of 0.71), but in the end still believed in it as price range is getting narrower by the day.
I have hongfok in my watchlist but I dont have funds, but all three have similar behaviors. They are 1) narrowing trading prices and 2) people losing interest in it, explained by lower volume. Ultra short term traders are flushed out, reducing 1-2 bids fluctuation and those left are those genuine in investing. With the situation like this, prices will first be well supported. Afterwhich, you just need a reason(catalyst) to cause a surge. Analyst reports will do more often than not do the trick.
I feel I might just be lucky on this occasion. Although I can justify my actions/rationale, it does not mean that I'm right. 3 out of 3 is nothing fantastic. Maybe after another year of trade, I will be able to tell if my thinking is correct. |
| posted by Nenix @ 1:24 PM |
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| US covering up? |
| US surged to pre correction level despite negative news related to subprime. While people might have already gotten used to the news, it seems like there might be (again, this is just guessing, so no factual stuff to back this up) window dressing as end of quarter is just a month away and elections are near as well. This is just like repainting a corpse. It might make things look pretty but beneath it, its still rotting. Anyway, meanwhile, I'm just going to ride this wave but to me, theres a limit to how much dirt u can hide under the carpet. |
| posted by Nenix @ 11:22 AM |
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| Risk Rating Updates |
The following is my order of risk of my portfolio from those with highest risk to those with the least risk. One obvious change is that the time horizon has been tweaked again. (I know I'm still undecided but too long term erodes the gains too much as there is too much time delay). So for now, extremely risky (more than 7), more than 5 (risky), moderate (3 to 5), least risky (below 3)
Nenix's counters
NB: The reason gold is so "risky" is because of its trade at 0.73. Rationally it seems like an error trade with the person wanting to sell at 73 instead of 0.73. But that aside, we can't assume that it is 100% safe. It is still "risky" according to calculations and thus, must still be careful.Labels: RiskManagement |
| posted by Nenix @ 10:45 AM |
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| Wheelock |
It has hit my buying trigger recently and it looks healthy. Property development counters are quiet recently due to all the buzz on China stocks. This counter is still lagging from its all time high and looking at other counters, they are lagging as well. Maybe it is due to fundamental reasons like property tax hikes etc but that's not my scope of analysis.
As a trend follower you can see that
1) A trend has emerged
2) SAR indicator is showing an uptrend
3) MACD going towards the positive region
4) MFI showing strength in market
5) It is currently 21.229% off its high of $3.58
However,
1) Short term uptrend might be a dead cat bounce (not likely)
2) Strong Resistance at $3.56 region
Regardless, I've bought some at $2.82, though at a premium, but this has a trend. I think the returns will be rather modest and trend might break at 3.56 (although I will still hold until it shows a clear reversal in trend). The cut Loss based on its activity should be placed at around $2.6, our reversal of trend, which ever comes first.Labels: Wheelock |
| posted by Nenix @ 10:25 AM |
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| Monday, October 01, 2007 |
| Optimism just isn't good news |
Sages say that feeling optimistic is often essential but in the context of the stocks market, it is more of a bane.
Rewind towards Late January, at that point of time, people were predicting markets to hit unbelievable levels and when CNA and SI forums were covered with unneccessary praising of experienced investors, "Wham!" the correction came. Finger pointing began and it lasted awhile. When things calm down, people are at it again, singing praises of good calls etc. While I do believe that those who share selflessly should be appreciated, complacency sets in. In July 2007, I reached an all time high of 70++% returns. For the first time, I felt proud because while famous investors averaged 25++% p.a, I manage 70+%. haha. That proved to be all wrong! The price shock came awhile later, and it hit my selling trigger. Yes, everything was under control and this scenario is still much better than my worst case scenario. Then a mindset started to crawl in. "I had winnings, so might as well go in again and buy on dips" But then, this isn't in my protocols for buying. And I made a huge mistake. Maybe its coincidence but weeks later come the correction.
After the correction, I told myself not to be happy by paper profits. They are just paper profits. I will only be happy when I liquidate everything, which is unlikely as there will always be trends elsewhere. Furthermore, my reminder of my unneccesary loss is still pasted near my study table to remind myself that it just takes ONE blunder to ruin everything.
Right now, things seems rosy, but to me, this is just a phase of bullish sentiment. If you guys are still not vested, I urge you all to invest with caution. Sentiments change quickly with huge macro news.
But in this short post, optimism might push prices, but as an individual, dont be overly optimistic. Must always try to treat a 15% gain and a 15% loss equally. Until we attain that, we can be a rationale trader/investor |
| posted by Nenix @ 5:25 PM |
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| NenixDreams Fund |
| Fund launchprice on 1st August 2006= $1
Target for 2007 = Beat STI index
Current price of NDF as of 1st Oct 2007 = $1.58
Current price of STI as of 1st Oct 2007 = $1.54
Difference with STI index is 0.04
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