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| Sunday, April 26, 2009 |
| Olam |
 Olam, from the trend is showing weaknesses in its strength despite positive trending. Various indicators are pointing towards a weakening trend with correction. However, as my system is based on trend direction, and not prediction, I have to enter a position. However, I wil be monitoring this counter closely as I think this will be the first counter that will hit the exit criteria. Trend Direction Although the trend direction is in an upward motion, the crossover seems weak. Trend Strength Trend strength also points to weakness in the trend. The +DI is going down signifying that the strength of the uptrend is weakening. The -DI is showing an increasing trend, indicating a selling pressure. However, as both lines are in the region of 20, it can be said that both strengths are weak in nature. ATR ATR has decreased significantly since its low of $0.835, indicating stability in prices. Momentum Momentum is currently weakening although generally it is still on an increasing momentum, indicating that the buying interest has waned. Volume Volume is in tandem with price direction and this is a characteristic of an increasing trend. Conclusion All indicators are pointing to a weak uptrend. However, the decision to enter is due to the fact that it is in an uptrend. Unless I have more screening criteria, I just have to live with it. What I can do is to maybe add more criteria but I feel that it would only make things more subjective, which I do not favor. If I have to rate this stock, it would be classified as a "weak uptrend stock" Labels: Olam |
posted by Nenix @ 11:26 PM   |
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| Kim Eng |
The decision to enter Kim Eng was slightly mixed because i reacted quite slowly when I realised the trend. Basically, the trend was showing positively two weeks ago, but i hesitated because the upside seems limited. Anyway, the analysis is as shown below. Trend Direction The 12w trend line crossed over the 26w trend line at a price of $1.47. Although I entered slightly late, I manage to get at $1.50. Although it crossed over, I deliberated in getting into this counter because the upside seems limited. However, this is something that I should not have done because I have allowed personal opinions to influence me. Trend Strength Trend strength seems to have waned in recent weeks, suggesting that it might go through a corrective phase. However, the +DI and -DI are going in favorable direction, the former going upwards, and the latter going downwards. If this persist, the trend strength would be able to pick up, moving in a favorable direction. ATR ATR is showing a decline which is a sign that prices are stabilizing. This is a common trait among most stocks after the panic selling situation that we face last year. The volatility range is about $0.113 per 14w, which is approximately 7.53% in 14w. Momentum Momentum is on the strong side with little consolidation. Coupling with the possible scenario of trend strength bottoming out, it is likely that the momentum will continue to be on the upside. Volume Volume has been consistent and not much analysis can be made out of this. Conclusion Although the trend is on the up, the upside seems to be limited. However, the trend strength as represented in the ADX trend signifies that divergence between the +DI and -DI might continue and thus indicating a increasing trend strength. Momentum is still strongly on the upside with minimal contraction. On the aspect of volatility, it indicates an approximately 7% movement in 14 weeks, which seems acceptable. The rationale of entry is due to the trend strength, the sustained momentum and the acceptable volatility.
Labels: KIm Eng |
| posted by Nenix @ 10:08 PM |
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| Tuesday, April 21, 2009 |
| OKP |
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I entered OKP when the Trendline crossed over at $0.31 on the week of 6th to 10th April, together with Wilmar. The reason it wasn’t published is because I thought Wilmar would require more focus. Anyway, the analysis below is based on my thoughts at that point of time and I will try as much as possible not to include hindsight analysis (knowing that it is in the $0.50 region now. Trend Direction As mentioned, this is the “must” criteria for my entry and the 12w crossed over the 26w. The crossover was rather convincing as it is testing a new “high” since the 52w low of $0.13. Trend Strength Trend Strength was still on a decline even though it seems to be changing in direction. This indicator in this instance is not very indicative due to the lack of trading volume. That said, the +DI hit the 40 mark, which signifies its strength in uptrend while the –DI is nearing the 20 mark. This gives clear indication that it has strong uptrend (if you can put aside the fact that this indicator is not indicative) ATR It is on a decline and it is a good sign as considering its liquidity, this should have wild swings in prices, but the falling ATR indicates that the stock has already found some ground and is stabilizing. Momentum Momentum seems to be cooling down and it might be possible that there will be some correction going on, though the indication is not strong. Volume Volume has been the main issue in this stock and no trend can be obtained as its trading volume is not consistent. (*This issue should now be better due to placement shares) Conclusion The risk mainly comes from the inconsistency in volume, thus incurring quite a significant liquidity risk. However, the main trend is on the up and with decreasing ATR, it seems that the stock has finally found some ground. Trend strength indicates the direction is going up. All in all, the long term uptrend is going up BUT if you look at the shorter term snap shot, this is a good opportunity for profit taking as it is overbought. It won’t be surprising to see profit taking in the next few weeks and this applies to all stocks as well. And it might even test the previous lows.
Labels: OKP |
| posted by Nenix @ 10:12 AM |
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| Monday, April 13, 2009 |
| Wilmar |
The decision to enter a position in Wilmar has been quite paradoxical. I have said that in the short term, the macro situation is overbought and there will be some sort of correction. However, I also mentioned that the mid-term situation looks quite optimistic and in my opinion, stocks seem to have bottomed out. Regardless, the reason I bought Wilmar has nothing to do with opinions. I will break down the analysis into different parts.
Trend Direction The 12w crossover with the 26w crossover has happened and it indicates that the price increase in recent weeks is faster than the average pace in the longer term. This is just an indication that prices are steadily recovering, which is the main reason why I decided to enter.
Trend Strength It might not be as indicative as most would believe, but I always use the ADX as a tool for analysis, what good is knowing a direction of a trend if we do not know the strength of it. From the 14w ADX line, it can be observed that it is below the 20 mark. Trend strength is relatively weak at the moment. Trend strength is a cyclical process, similar to momentum, and at this point, it seems to be lowest. I am not guessing anything as ultimately trend direction is the main criteria while the remaining indicators are just supporting rationalization.
As i was mentioning, not only does the trend strength seems to be bottoming out, the -DI line (often an indication of the strength of downtrend) is gradually going down as well, with the +DI line going in the opposite direction.
If there were any indication of worry, it would be the fact that all three lines are hovering in the lower region, which might indicate that trend strength is still low at the moment.
ATR An indication of volatility, it is now the bane of most trend traders (unless you are a swing trader). ATR has been plunging sharply since its lowest point while prices are steadily going up. This indicates that people are reacting less violently and confidence in stock is slowly creeping in.
Momentum Momentum has been building up for the past few weeks as observed from the chart. Any retracement (short term trending) has been shortlived.
Volume Volume trending has been an issue though as volume is decreasing with price increase. This is often the indication of a down trend.
Conclusion It is definite that the short term trend is on the up and the middle term trend is showing good recovery. However, the recovery of the long term trend remains in question. Nonetheless, the moving average has indicated a crossover, triggering a buy signal. The trend strength supports the general analysis of the situation and decreasing ATR aids the cause as well.
All in all, it is a counter with seemingly lesser downside risk.
Labels: Wilmar |
| posted by Nenix @ 2:11 AM |
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| Monday, April 06, 2009 |
| The Dead Cat Bounce |
| For the past month, stocks have been doing quite well. While it seems like it has hit the bottom, I believe that it is still too early to decide because this might be a retracement from the big selldown in stocks.
As I mentioned in the previous posts, I have adopted a longer term perspective of trading. I shall break down the general trending in stocks.
Short Term (12 days to 25 days) It seems that it has reached the oversold region if you look at the MACD, ADX of the general STI component stock.
This is perfectly normal as we have been seeing a rally for the past month. However, whether it will hit oversold region and test previous lows remain to be seen.
Medium Term (5 weeks to 12 weeks) Some stocks have exhitbited healthy mid term trends. These stocks (OKP, Raffles MG, China Fish, Wilmar) have lows higher than their previous lows, which are characteristics of an uptrend. Ultimately, these are the counters that I will be watching closely to see if they are to hit the start of the long term trend
Long Term (12 weeks to 26 weeks) As stated in the previous posts, this indicator while limits trades, will be very irresponsive to changes and it is the initial indicators that bear the most risk when entering a long term trade. However, while some of the stocks show characteristics of a long term recovery, the fact that it coincides with a short term oversold means that there might be room for correction and risk of downside is therefore high.
Verdict While there are opportunities, there still lies risks that are quite apparent. The fact that the start of the long term trends of some stocks coincides with the potential peak of some of the short and middle term trends shows that downside risk in the short term is still present. Based on general trends, I would suggest that we should hold and enter our positions at those which shows strong long term trends at prices which is near to previous long term low. This would minimize downside risk.
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| posted by Nenix @ 10:55 PM |
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| Tuesday, March 31, 2009 |
| Trading Philosphy |
| With the looming crisis, it has got me thinking about my trading strategies. While i still hold true to my ideology about trading, i do believe that adaptation of my current technique is required (which is why i am a contributor for sharesynthesis)
In this post, i will discuss about my current philosophy for trading. I believe that a successful trader needs to have in the order of importance. - A grasp on the pschological aspect (understanding the various biasness a trader might have)
- Money Management, the decision to determine the position sizing and the actions required for the stock.
- Trading System, a guiding system to ensure profitability in the long run
If I have to classify my trading style, I think I would fit under "Long Term Trend Trader". This might sound strange to some because most traders are usually synonymous with "Short term". But i beg to differ. As long as one sells a share, a trade has taken place and thus be labeled as a "trader". However, let's not go into this as it will be a never ending debate.
The rationale for adopting such style is simple: - Trend is the actual indicator that shows the movement in the price. It might be due to fundamentals, sentiments, political agendas and many more, but ultimately it is the trend that will exhibit these changes. I feel that analysis (tracking) of the trend is the most important aspect of my philosophy.
- A longer time horizon is adopted, because if the time horizon is too short, it will lead to frequent tradings and profits might be eroded. The trade-off for this is that following a longer time horizon, I will not be able to react as quickly to changes.
By following trends, one thing is for sure, I will be able to make a profit. However, the degree of profits might not be optimal due to lag in response. This is something that I will have to work hard on in the near future.
In the future, in the process of organizing my analysis and making it more structured, it will be broken down into the various components. - Trend Analysis
- Momentum Analysis
- Overall Assesment
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| posted by Nenix @ 4:57 PM |
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| Tuesday, November 25, 2008 |
| Midst of Chaos |
In this point in time, i guess most of you know that we are in the midst of a long recession. However, this does not mean that it is a bad thing. After all, you seldom see such phenomenon occur and we should in actual fact capitalize on this once-in-a-lifetime kind of recession. Right now, I am accumulating cash and waiting for the long term trend to turn favorable. It is tough being a long term trader because more often than not, you actually go in at a not-so-attractive price and will have to stick through the volatility. However, being set on a longer horizon, i will not be whipsawed by the swinging prices.
Right now, the only stock portraying a long term uptrend is SingFood. I have entered quite a bit and will decide to hold till the long term trend bends downwards. If you ask me, i am unsure if this is a sure win stock. From reading up, this is just a good defensive, high-dividend yield stock. However, its technicals display a strong upward trend. it might be undergoing some correction now but lets see how it turns out after a few months.
P.S it has been a long time since i last blogged and i think its partly due to work. Working in the financial sector is tough recently and on top of that, working hours are insanely long. 12hr working days are not surprising and for the past months, working till 12am or 1am is nothing worth mentioning. Hopefully, things do die down for now, so i can focus on scanning for bargain buys. |
| posted by Nenix @ 6:55 PM |
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| Thursday, October 09, 2008 |
| Rough Times |
It has been a looong time since I last blogged and I wonder if anyone is still reading. But nonetheless, I'm kinda tied at the moment because of work. Working in an Operations field is not easy. Long hours, bad pay, it really sucks big time. However, markets are bad and I feel we have to be more defensive when jobs are concerned.
With respect to my trading, long term wise, they are all downtrends, and naturally, I am very light on positions. I would love to short using CFD but because of job constraints, I'm worried that I might not be able to monitor closely.
I have not been tracking my position with respect to STI index but I have a feeling that I might be outperforming the index!! haha.. Will do an update on that soon.
Right now, other than accumulating some REITS, I'm just hanging around waiting for trends to turn. In fact, for a long term trend trader , this is a good time since when it recovers, it will be a new long term trend.
I felt that recenlty I have been doing ok. I didn't buy due to reashness and everything is in accordance to my rules. Stocks like RafflesMG, Asiaenv, Tathong, China Fish are all counters which i just followed my bro (fundamentalist). The only trend trading stock I have is SMRT.
Well, things seem to go dirt cheap and looking at the economic situation as a whole, things are starting to impact us. Jobless data, sales data, homeless data are all gonna hit us sometime soon and presto, I will be in a recession.
But this is an opportunity. So its best to save up now and wait till things settle down before loading in on properties and stocks. |
| posted by Nenix @ 12:45 AM |
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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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