Judging from the earning potential of the counters I am currently having, it would take a while before I actually cash out. Afterall, this will not be like the short rally that took place more than a month ago, and the normal market corrections will be expected as stocks continue on an upward trend.
Better than expected economic numbers and near zero interest rates have brought back market liquidity and trading volume into equities. It is this time when small players put their money into the market, either because they are truly confident of the economy or simply driven by the fear of missing the uptrend. In any case, there is defintiely potential for the market to continue growing for the next couple of months.
Having held my bundle of small caps for a couple of months, it is about time I see some performance from them.
Tuesday, July 28, 2009
Friday, July 24, 2009
CharteredSC
The recent upward momentum has expectedly pushed the STI past the 2500 mark this morning, and it has shown no signs of abating, at least for now.
With some additional capital on hand, I made a purchase of Chartered Semiconductor earlier at $2.24, as it just seems to be picking up steam on the uptrend and I will be expected to rise over the next week or so. Prices have finally breached the upper resistance levels in the MACD and Bollinger after spending several weeks below/within them.
The technology sector has probably also seen its worse in Q1 2009, and would be en route to a steady recovery. Afterall, US giants from the technology sector Intel, IMB and Texas Instruments have reported stronger than expected results in Q2, and this would be a great sign to local players like Chartered, which will benefit from the blossoming of certain US tech companies which it has contracts with.
Other local listed firms in the tech sector: Armstrong, Nera Telecommunications, Venture
With some additional capital on hand, I made a purchase of Chartered Semiconductor earlier at $2.24, as it just seems to be picking up steam on the uptrend and I will be expected to rise over the next week or so. Prices have finally breached the upper resistance levels in the MACD and Bollinger after spending several weeks below/within them.
The technology sector has probably also seen its worse in Q1 2009, and would be en route to a steady recovery. Afterall, US giants from the technology sector Intel, IMB and Texas Instruments have reported stronger than expected results in Q2, and this would be a great sign to local players like Chartered, which will benefit from the blossoming of certain US tech companies which it has contracts with.
Other local listed firms in the tech sector: Armstrong, Nera Telecommunications, Venture
Wednesday, July 22, 2009
As markets take baby steps toward recovery...
In 'Winners in the next bull market', The Business Times July 22 Wednesday, James Stack, editor of the InvesTech Market Analyst newsletter, noted that stocks that tend to lose the most in a bear market are the best performers in the previous bull market.
However, he also clarified that these were the same sectors that regain their leadership status when the economy comes out from the downturn, simply because they fell the most.
Considering the example of US technology shares in the late 90s, these were the darlings of the day that crashed the hardest in the bears of 2000 to 2002. However, they too, rebounded the quickest for the first months after the bear market, significantly outpacing the rise of the index.
It is still crucial to note that sentiments still play a great role in trading volume and possibly rate of recovery of certain sectors. For once actual valuation of the sectors comes into play, it is still up to the cash flow, revenue and sustainability of the industry. The tech bubble that burst showed that tech firms back then were more hype than substance.
So as the market recovery progresses modestly, which sector should we pay attention to to lead us on? According to Gordon Fowler, the chief investment officer at Glenmede, an investment firm in Philadelphia, this will largely depend on what type of recovery is ahead.
For instance, expectation of a speedy recovery would mean a bet on economically sensitive investments, such as financial shares and emerging market stocks. However, if the economy is expected to remain weak over a sustained period of time even after a turnaround, then good growth companies with solid balance sheets will be a good choice. In the case of US, equities that do not rely significantly on consumption will be nice bets.
Mr Fowler also said that the US technology companies, which traditionally stood to gain in both strong and weak markets, had repaired their balance sheets after the last downturn, and hence were good companies that now even held more cash than any other sector.
However, he also clarified that these were the same sectors that regain their leadership status when the economy comes out from the downturn, simply because they fell the most.
Considering the example of US technology shares in the late 90s, these were the darlings of the day that crashed the hardest in the bears of 2000 to 2002. However, they too, rebounded the quickest for the first months after the bear market, significantly outpacing the rise of the index.
It is still crucial to note that sentiments still play a great role in trading volume and possibly rate of recovery of certain sectors. For once actual valuation of the sectors comes into play, it is still up to the cash flow, revenue and sustainability of the industry. The tech bubble that burst showed that tech firms back then were more hype than substance.
So as the market recovery progresses modestly, which sector should we pay attention to to lead us on? According to Gordon Fowler, the chief investment officer at Glenmede, an investment firm in Philadelphia, this will largely depend on what type of recovery is ahead.
For instance, expectation of a speedy recovery would mean a bet on economically sensitive investments, such as financial shares and emerging market stocks. However, if the economy is expected to remain weak over a sustained period of time even after a turnaround, then good growth companies with solid balance sheets will be a good choice. In the case of US, equities that do not rely significantly on consumption will be nice bets.
Mr Fowler also said that the US technology companies, which traditionally stood to gain in both strong and weak markets, had repaired their balance sheets after the last downturn, and hence were good companies that now even held more cash than any other sector.
Monday, July 20, 2009
Certain stocks to monitor
Haven't updated over the weekend as I felt really sick. It's good though, that I've recovered sufficiently today to study the markets once again as it opens for this new week.
At the point of typing, the STI is at 2447 points. Sentiments have been rather bullish and there are certain counters worth taking note of that I feel have potential riding on this uptrend.
One of which is Raffles Education Corp and the other STI ETF, which is SGX's own exchange traded fund. There seems to be divergence on the MACD and prices have crossed the moving average. Furthermore, prices on both counters have passed their previous resistance level.
Other counters I am currently monitoring closely include Hyflux water trust and Singtel. Hyflux water trust has been bullish recently, with prices greatly exceeding the previous resistance level. Prices seem lofty at this point in time but the next few days will provide a better idea on its direction and sustainability. Singtel has been on a consistent uptrend but gains might taper off if prices start to fall or move sideways. However, there are coming dividends on Singtel on the 5 August. This might push the prices up further till then. Close attention is needed for Singtel this week.
Happy trading!
At the point of typing, the STI is at 2447 points. Sentiments have been rather bullish and there are certain counters worth taking note of that I feel have potential riding on this uptrend.
One of which is Raffles Education Corp and the other STI ETF, which is SGX's own exchange traded fund. There seems to be divergence on the MACD and prices have crossed the moving average. Furthermore, prices on both counters have passed their previous resistance level.
Other counters I am currently monitoring closely include Hyflux water trust and Singtel. Hyflux water trust has been bullish recently, with prices greatly exceeding the previous resistance level. Prices seem lofty at this point in time but the next few days will provide a better idea on its direction and sustainability. Singtel has been on a consistent uptrend but gains might taper off if prices start to fall or move sideways. However, there are coming dividends on Singtel on the 5 August. This might push the prices up further till then. Close attention is needed for Singtel this week.
Happy trading!
Thursday, July 16, 2009
Bulls are back...for the moment
The STI has begun an uptrend as it finally breached the 2400 support level this morning. This reversal of a downtrend signals an appropriate time to purchase counters that have been posting consistent profits and have healthy cash flow, in other words, counters with high intrinsic value.
Financial and property counters are expected to lead the uptrend, with local banks likely to benefit from the pullback of foreign banks from corporate lending and also the recent suspension of several bond markets has shifted business to direct bank lending. In the property market, recent boom in sales of private residentials has been due to price cuts from developers.
The jittery fluctuations in the STI between 2200 and 2300 the past 2 weeks due to apprehension of the investors have been somewhat mild yet stable relative to the weak US market. Trading volume had been low, but sentiment is going north for this 2nd quarter with a rise in GDP forecast and fewer job losses.
The moving average convergence divergence (MACD) registered a bullish divergence yesterday, similar to the ones on 13 March and 4 May, when rallies followed. If this uptrend persists, the index will likely to hit 2500 by the end of next week, higher than the last attained peak of the rally that happened last month.
Financial and property counters are expected to lead the uptrend, with local banks likely to benefit from the pullback of foreign banks from corporate lending and also the recent suspension of several bond markets has shifted business to direct bank lending. In the property market, recent boom in sales of private residentials has been due to price cuts from developers.
The jittery fluctuations in the STI between 2200 and 2300 the past 2 weeks due to apprehension of the investors have been somewhat mild yet stable relative to the weak US market. Trading volume had been low, but sentiment is going north for this 2nd quarter with a rise in GDP forecast and fewer job losses.
The moving average convergence divergence (MACD) registered a bullish divergence yesterday, similar to the ones on 13 March and 4 May, when rallies followed. If this uptrend persists, the index will likely to hit 2500 by the end of next week, higher than the last attained peak of the rally that happened last month.
Monday, July 13, 2009
Only buy equities you understand
Investors buy up worthless GM shares - Business Times Monday 13 July
Shares in "General Motors", the company says, are worthless. But many investors apparently have mmissed the message.
GM's stock, which now represents the company's bankruptcy estate, continued an improbable rise in price on Friday, prompting concern by company officials and securities regulators that investors are confused.
The stock, which trades under the ticker symbol GMGMQ, gained as much as 43% on Friday, after GM announced that it had completed the sale of its assets to an entirely new company.
From this, one can be reminded again that share prices are simply a gauge of market sentiment towards a certain stock, and money can still be made and lost despite the intrinsic value of a company like GM becoming nearly zero. A good lesson is to never buy stocks that you are unclear about, and this is a mistake that I had made once, buying the shares of Bankunited Financial without having sufficient understanding of the company's current status. It was quite an expensive lesson, but I'm glad I made this mistake early in my investing journey.
Shares in "General Motors", the company says, are worthless. But many investors apparently have mmissed the message.
GM's stock, which now represents the company's bankruptcy estate, continued an improbable rise in price on Friday, prompting concern by company officials and securities regulators that investors are confused.
The stock, which trades under the ticker symbol GMGMQ, gained as much as 43% on Friday, after GM announced that it had completed the sale of its assets to an entirely new company.
From this, one can be reminded again that share prices are simply a gauge of market sentiment towards a certain stock, and money can still be made and lost despite the intrinsic value of a company like GM becoming nearly zero. A good lesson is to never buy stocks that you are unclear about, and this is a mistake that I had made once, buying the shares of Bankunited Financial without having sufficient understanding of the company's current status. It was quite an expensive lesson, but I'm glad I made this mistake early in my investing journey.
Wednesday, July 8, 2009
low trading volumes; sideway prices
After much study of the moving averages and recent pricings, it seems that the profitable stocks in my portfolio are at a point that is slightly past the support level, but moving slightly sideways, at least for these couple of weeks. Not ready to sell yet.
I would probably just hold on to the counters until the trading volume picks up and the markets start gaining positive sentiment before I streamline my portfolio.
I would probably just hold on to the counters until the trading volume picks up and the markets start gaining positive sentiment before I streamline my portfolio.
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