A Gift to My Children: March 2016

Friday, March 25, 2016

My analysis 25 Mar 16 - STI, OCBC

STI
◆ MACD crossing down
◆ RSI from peak and going down, RSI 59 now
◆ Parabolic expected to go below price in next few days
◆ Volume going lower

Will likely to slide back. Not likely to move to 3000.

OCBC
◆ MACD crossing down
◆ RSI from peak down to 58
◆ Price retreat from MA 200

Will likely to slide back to January range. I will sell all at lost and fight back again.

Thursday, March 17, 2016

My analysis 17 Mar 16 - HKL, STI, OCBC

HKL
◆ MACD seems turning down but above 0
◆ MA 20 going to cut MA 50 upwards
◆ Lower low trendline, if break $6.4 then there is chance to go up further
◆ Big volume around $6.8
◆ RSI 66 now

I still have 100 shares bought above $7. If price go above $6.5, I will let go and cut lost.

STI
◆ RSI 69
◆ Uptend after MA 20 cut MA 50 upward
◆ Strong uptrend if price cut MA 200 at 2950
◆ Although it went up lately but slight drop in volume.

Likely to carry on uptrend.

OCBC
◆ Price touches MA 200, once cross that then strong uptrend
◆ RSI 73
◆ K 97
◆ MACD above 0 and uptrend.

Generally think it will go on. I have 500 shares bought at $10.4. At this point I cannot tell if it will go above $10 but I will start selling some at $9.4. More of cut lost and buy back at lower price.

Although all indexes have gone up but I don't feel correct. The latest uptrend is driven by holding back interest rate hike. Fundamentally the economy is still weak, the rally not due to growth but due to news from Federal reserves. The following are holding back my view that the economy is rosy,
1. Output reduces
2. Property prices downtrend
3. Retrenchment on going, although unemployment rate is low.
4. Forecast of growth rate reduces

Tuesday, March 15, 2016

Upside vs downside

Buy and hold strategy or buy and sell at your target price.

I don't think a buy and hold (forever) strategy is a quite relevant in Singapore. Although this method has made Warren Buffett to be the most successful investor but in Singapore context it may be a little difficult. Because I cannot find a company in Singapore is of eqivalent scale or equal growth like Coca Cola, US Post,... Singtel is the biggest company in Singapore based on market capital and has the most influence to STI but in my view I don't think it can be a multi bagger over the course of 20 to 30 years.

I believe a buy low and sell high method will be relevant. The question most will start asking will be "how low is low and how high is high". We will never be able to catch the lowest and sell at highest, just buy reasonably low and sell at reasonably high.

First of all you have to select a stock with good fundamental to start with. This will be the strategy I will use to evaluate a price I am ready to enter.

After selecting a stock with good fundamental, a very general method is "upside must be 2 times more than the downside".
Determine current, lowest and highest price in the last 5 to 10 years.
Example OCBC, the lowest was around $4 in 2009 and around $11 in 2015. Current price in March 2016 is $8.8.
Downside is $8.8-$4 =$4.8
Upside is $11-$8.8=$2.2
From this case the upside is not more than downside. So wait.
It will be attractive when price drops to $6, where upside is $5 and downside is $2. So upside is 2.5x the downside.
If you are looking at long term investment then the lowest and highest price should be 5 to 10 years where it is usually a duration of a bull and bear. But if you are looking mid term, the lowest and highest should be taken during the last 1 to 2 years. If no upside, then pass. There is always opportunity else where.

This method of "upside must be 2 times more than the downside" applies to buying property or even in life. For every decision you make, the benefit must be always 2 times the risk involved. This will put you in a better position as the chance to fail is minimized. Even if you fail, your lost is at minimal. For example OCBC, there is always a possibility that OCBC may drop to $2.

Wednesday, March 9, 2016

What I am going to do this coming "winter"

At this point (6 Jun 16), S&P at 2099, close to historical high of 2134. In the coming months, there is a slight it will continue to rise and challenge 2134.

What I am going to do, buy SPXU and SLV.
15 shares - $28
20 shares - $27
30 shares - $26
40 shares - $25 may add more if it really reaches this price

Buy between US$5000 to 10000 and let run run during crisis.

As for silver, I am still monitoring and looking at a right price to enter.

The rest of the stocks, I will try to clear off in coming months as I dont see a tremendous growth in near future and wait. But at the moment aside from weak export all over the world, I dont see any serious issue to trigger the meltdown.

Thursday, March 3, 2016

My analysis 4 Mar 16 - OCBC, STI

STI have been going up and for consecutive 5 trading days. Let's look at STI and OCBC TA and see we are now,

OCBC
◆ MA 200 is at $9.1 and current price $8.8.
◆ high volume ard $8.9 to $9. Likely break $9, and those stuck at $9 will sell. Seems like the high volume range is distribution.
◆ MACD above 0, uptrend still intact.
◆ RSI 73
◆ K is > 90
◆ MA 20 likely to cross MA 50 upward

STI
◆ MA 200 is 3000 and currently at 2825
◆ high volume at 2900.
◆ RSI 69
◆ MACD above 0, uptrend still intact
◆ K is 96
◆ MA 20 likely to cross MA 50 upward
◆ broke lower low trend line.

My view:
STI and blue chips are likely to continue to go up. Resistant at 2900, very high chance it will cross 2900 points.

I have sold 100 shares OCBC at $8.5 bought at $8.72 although sold at lost but I dont think this rebound can continue very long. I want to accumulate cash now.

Will only buy STI ETF if break new low. If price for OCBC break $9.4, I will sell all OCBC at $500 lost as I believe it is possible to buy back at $4 in future. Although for long term investment we shouldnt care about price fluctuation, but right now I believe we are at the verge of crisis (I am not an god, I dont know when a crisis is coming). As many people would always say "cash is king".