Noble Group - Bottoming out with Adam & Eve

Noble Group started to sell off on 24th Feb 2017 and the decend was relentless, hitting the first bottom only 3 months later on 24th May at 0.305.  However it wasn't clear that was bottoming until 19th June when a strong upward bar propelled it close at 0.48 and an Adam & Eve bulllish pattern became apparent. The next couple of days saw a healthy retests of this 'necline' with closes above 0.45.  Expect a recovery trend in the coming weeks.

Oil & Gas Stocks have bottomed!

The following is our FTSE Index which represents our Oil & Gas stocks.

A lot of our oil and gas stocks have fallen on hard times since late 2014 (Some went into receivership!).   The decline has been relentless in 2015 and in 2016 it started to bottom out.

In Jan this year, it started to break above the "neckline" of an "Adam & Eve" bottoming formation and is looking to be in a sustainable recovery. Adam & Eve is one of my favourite reversal formations.  Read about it here.

I am expecting many of our trodden down (but still surviving) oil & gas stocks to continue on a recovery path this year.  Watch for them!

Imperium Crown - Bullish Right Angle Wedge!

Imperium Crown has been forming a Rising Right-Angle Wedge for the past 2 weeks.  
(read more about this stock pattern here).

Today it looked ready to to break up of this wedge I decided to add to my stake in this counter while it was around 0.106.  Not long after it start to break above 0.108 and what a strong move after that!  It hit 0.12 before profit taking came in and closed at 0.115, still a 10% move from yesterday's close at 0.114.  Not too bad!

Just before breaking up today

Imperium Crown - forming a right-angle wedge pattern (4hrly and daily)

Break up!

Imperium Crown - broke up of the wedge strongly!

Jadason - Potential for Bigger Move

Jadason caught my attend in April as it make s strong move up in late March and then spent the first half of April retracing 50% of the prior move in March.  It found support at this 50% retracement (0.049) and began to propel up again, closing at 0.074.

I will not be too surprised if it needs to consolidate (ie pullback some) from here but the bigger picture (weekly chart) below is suggesting the move is far from over.    

The odds are good that it could reach 0.115 over the next few weeks/months (ie another 55% upside from the current price of 0.074).

I will put a trailing stop as having good odds is not a guarantee that the trade will work out according to my expectations. Always have a safety net and cut loss if it doesn't work out.

Let's see!

Daily Chart of Jadason

Weekly Chart of Jadason  

ADDVALUE - broke up today on strong volume!

I was just looking at AddValue a couple of days ago when it was approaching the green trendline resistence of 0.056.  My expectations was that if it broke above, then we can probably expect it to head towards the projected target of 0.096.  

Today it hit 0.056 shortly before 4pm and buying frenzy came in to push it to close at 0.063 by 5pm! 

Okay, it is unlikely to be a smooth sailing straight line up to the projected target of 0.096, I would expect some consolidations/resistences along the way, esp around 0.075 to 0.088.

I would consider to take partial profits on the way up, plus trail my stop loss upwards as the stock progresses.

read my previous post about AddValue here

Sheng Shiong - Short term swing target

Shengshiong consolidated for the past 1 month in narrow range before finally make a break above the trendline resistence at 0.985.  

Based on 100% project of it's prior swing move from this breakup level, I am expecting that this swing will last till about 1.045, which is a 6 cents (6.1%) moves from 0.985.

Let's see!

ADDVALUE - poised to break up above 0.056 soon

Addvalue has been steadily building momentum.  It looks ready to break above 0.056 in the near future.  When it does break above (ideally with strong volume), I will be looking at a projected target of 0.096 (71% upside).

p/s as usual, trailing stops is essential on the way up as not all trades will reach projected targets.

Let's see!

Cityneon - Inverted Head & Shoulders formation (bullish)

Cityneon could be forming an inverted Head & Shoulders (H&S), a potentially bulllish formation, one of my favourite patterns to trade!  See explanation for this chart pattern here.

I have drawn a slanted as well as a horizontal neckline.  Initial entry is at 0.91 (based on the slanted neckline) and should it be able to go above 1.00 (horizontal neckline), then the inverted Head & Shoulders formation is double confirmed.

Should Cityneon be able to break above 1.00, I will look to take partial profits at 1.08 and then 1.20.   Of course, projected target may not materialise (though the odds are quite good with a H&S formation, but odds aren't guarantees), hence trailing stops are still required on the way up.  

Imperium Crown - broke up into Stage 2 this week!

Imperium Crown broke strongly above 0.084 (yellow dotted trendline) last Thursday (27 April), giving the first indication of a possible trend momentum.  Then yesterday (2 May), it finally broke (strongly) above 0.094 (a horizontal resistence), confirming it's debut into a Stage 2 stock.

Projected target is 0.148.  I will be trailing my profits as it progresses upwards, in case it is not able to reach this target.  So let's check back in a few weeks' time.

Chasen Holdings - 113% move in 8 days!

On March 24, I wrote about Chasen Holdings being another stock in early Stage 2 (see my original post here). 

At that time, Chasen was at 0.067.  Just 8 days later, it hit a high of 0.143 (a 113% move!).
It as such a quick strong move and I have decided to lock in the profits. :)

Blackgold Natural Resource - 80% profit in just 2 days!

On March 26, I spotted Blackgold Natural in early Stage 2 (with good volume to boot).  (see my original post here).

Entering it at 0.108, what followed the next 2 days was beyond my expectations!  It shot up vertically to hit a high of 0.195 (>80% move from my entry).  The next day, I saw a possible short term reversal and decided to lock in all my profits at 0.188 (74% gross profit, can't ask for more).

It is now consolidating between 0.170 to 0.195.  The move might not be over yet unless it starts to close below 0.170.  Let's see.

Spackman - Follow up on this harmonic swing trade (profitable trade)

On March 26, I spotted a Bulllish Bat/Gartley pattern (see the original post here) and the plan was to enter between 0.16 to 0.163.  The next day, Spackman traded between 0.158 to 0.165, making the entry possible.  However, it continued to whipsaw about between 0.167 and 0.157 for the 7 days (not easy on the emotions, even though the inital stop loss just below 01.54 was not triggered).  

Finally on 6 April, Spackman finally making a decisive move up, hitting a high of 0.182 yesterday!

Entering at 0.163 and taking partial profits at 0.18 would have yielded a gross profit of 10.4% in less than 2 weeks, not too bad.  For the rest, I would advise to trail the stops to just a tick or 2 below the last candle low of 0.175.  I would consider to take another 1/3 (or even all) the profits around 0.19 where there is possible resistence coming up there.  

The more gutsy could attempt to hold to see if it is possible to reach 0.205 (trailing the stops up).

Koh Eco - Off to a solid start into Stage 2

As I mentioned in my post on 13 Feb that a lot of Penny Stocks are getting into early Stage 2 (the start of a new bull cycle), more and more penny stocks have been breaking out of their base formation.

Here is another one, off to a solid start looking at the huge volume upon the breakup.
However a word of caution, if you have missed entering near the breakup level (in this instance it is at 0.101), then do not chase blindly in..  Wait for some consolidation to accumulate.

Net Pacific - Accumulation going on

Look at Net Pacific.  Strong volume in the past few weeks... waiting for a break above 0.08.

Jubilee - Another Penny Stock in accumulation mode

Since the begining of this year, a lot of pennny stocks have been in accumulation mode and gaining momentum in the last few months.  Here is another one moving into Stage 2

Stocks waiting for a breakup - Tritech

Here are a few more stocks potentially getting into Stage 2 of the bull cycle to watch out for.  However, until they break up and depending on the volume, the momentum could differ. 

Blackgold Natural Resource - early Stage 2

Blackgold Natural Resource has broken into stage 2 (above 0.08) with strong volume.  So far it is sustaining.  Way to go.

Spackman - Bullish Bat / Gartley Pattern for a swing up

I am looking to long Spackman (in the region 0.160 to 0.164) as it has formed a Bulllish Bat / Gartley Harmonic Pattern on it's chart.  

Looking for a possible swing target of 0.174 to 0.205  (6.7% to 16.7% respectively) from it's last close at 0.163.  

The initial stop loss will be placed 2 ticks below 0.154 (ie 0.152).  If it is able to reach 0.174, I am looking to take 1/3 profits and trail the remaining positions by moving my stops upwards.

Chasen Holdings - broke up into Stage 2!

Chasen Holdings broke above a longer term resistence of 0.062 with formidable volume yesterday.  It is certainly potential for a good run especially if it could clear the next resistence zone (0.073 to 0.086).  Watch out for it.

However, a word of caution: note that this stock is on SGX's watchlist.  If the technicals come true, they could be off the watchlist in due course.  Let's see!

STI - near term headwinds around 3160

A word of caution here.  STI could be facing some resistence around 3160 in the near term.

This is both a fibonacci 61% retracement up of the last peak-to-trough as well as a horizontal resistence (this level it was a previous support in 2014 but broke down in 2015).

US Crude Oil Inventory Report out tonight . How will it play out for oil stocks?

The price of Crude Oil suffered a steep plunge after the latest the Weekly Petroleum Status Report showed that US crude oil inventories had risen to an all-time high.


Is the picture getting bearish for Crude Oil?  Technically, the charts of Crude Oil (and similarly Keppel Corp and Sembcorp Marine) are at critical junction.  Is it in danger or an opportunity to long right now?


We might get an inkling after tonight's inventory report. 

Property Developers that are in (early) Stage 2

Today, the government has announced some easing on Seller's Stamp Duty as well as removing the Total Debt Servicing Ratio requirement for an equity loan that is 50% or less. 

This may be only a baby step in the easing of our property cooling measures but is enough to sent most of the property stocks surging.

Our property counters are at various levels of the cycle, but are some that are still in rellatively early Stage 2 and likely to have good room to move in the coming months.

SembCorp Marine - 2nd chance to stake

After my last post about Sembcorp Marine (SM), it broke up above 1.90 and hit 2.08 within 3 days (9.5%).  However it then started to retrace and came all the way back to the initial breakup zone.

If you had miss the chance to stake earlier, this is your 2nd chance to stake.  It is normal for a stock to break up strongly above a resistence level only to see it come back down to "square one" a few days later.  This can happen due to "noise" in the market, in this case it is due to the fear that US' relentless oil production will send oil price free-falling again.

As this stock is still at a relatively low base, (ie early stage 2), then there is a reasonably good chance it will continue on the uptrend after re-testing this breakup level. 

Today at 1.87-1.90 is probably our 2nd chance to enter with a stop loss placed slightly below 1.85.   

GSS - surged 58% in just 3 weeks!

Since my previous post on GSS Energy (13 Feb), it broke above 0.126 on strong volume and climbed steadily.  It went parabolic in the last 2 days and surged to a high of $0.19 - a 50% move in just 3 weeks!

However, it also started to face strong profit taking and closed 0.174, forming a gravestong candlestick (potentially bearish in the short term). 

It's time to take some profits here and tighten the stops for the rest of the position.

Chart Patterns for Major Trend Reversal

I love trading chart patterns when I see them.  If you are a shorter term trader, you will be looking for candlestick reversal patterns.  Candlestick reversal patterns are useful for astute traders for get in and out of a swing (which may last from minutes to days depending on the timeframe traded).  

However, if you are someone who prefers to look for major developing trends (ie early stages of a bull or bear market), then you should look out for some major reversal chart patterns that formed after an extended up or downtrend.  These patterns usually takes weeks or months to form and confirm.

Here are some some major bottoming or topping patterns that I look out for:

• Head & Shoulders 
• Double or Triple Top/Bottom
• Adam & Eve

1.  Header & Shoulders 

Below is what happened to Dow Jones in 2008 (Subprime crisis).  The warnings were there in its chart pattern months before sub-prime became daily headlines news .  

Sometimes, a chart that has broken below the neckline could "recover" to retest the neckline.  Should it falter here, it is the last chance for investors to get out.

After a major decline in 2008, Dow Jones began to show a bullish reversal H&S by July 2009.  The headlines all over were still extremely gloomy but if you had sported this inverted H&S, you would have seen "opportunity" instead!

What I wrote about DJ in 2009.  It was right on cue.


2. Double Tops or Bottoms

In March 2009, STI retested and bounced off the low that occured in October 2008.  This formed a double bottom (a major one as it was after an extended downtrend and took months to form).  The astute trader could enter as soon as they see a strong rejection of the last low while the conservative traders would wait for a confirmation to form (ie a break above the neckline) before staking.  Still plenty of upside from there.

Double Bottom

 Double Top

3. Adam & Eve 

Adam & Eve Top/Bottom is the modified version of a Double Top/Bottom, with the retest of the 1st top/bottom being a more gradual and rounded formation.  Sometimes the pattern is more apparent on the weekly (rather than daily) chart.

Semcorp Marine - sustainable recovery if above 1.90

An Adam & Eve pattern is forming on Sembcorp Marine.   This is a potentially bullish pattern, confirmed upon breaking above the neckline at 1.90 .

This stock has been in a down trend since hitting a high of  $5.46 in 2012 and since then, it has seen a number of rallies that failed.  The formation of an Adam & Eve pattern now is potentially a harbinger that it's worst could be over.  A break above 1.90 would confirm this.

Moya Asia - Accumulation

There has been a lot of accumulation for Moya Asia in the recent months.  The chart is in stage 1 (bottomed out and forming a base).

It is still in early stage, and could still take a while to move to the next critical "resistence" levels of 0.08, and finally 0.12.

0.12 is very critical and should it be able to go above this level, then recovery is underway with a projected initial target of 0.22.  

Here is the big picture (larger time frame):

Here is a close up picture (near term timeframe)

Just because a chart looks right technically does not mean it will work according to expectations all the time.  The current stop loss level of Moya Asia is 0.65, below which any near term bullish expectations will have to take a hiatus.

Noble - attacked by Iceberg Research on Friday!

On 14 Feb, I wrote that Noble Group had broken up into Stage 2 above $0.21 and the odds are good that it could rise to an initial target of 0.30 (40% upside). See my previous post here.

Less than 2 weeks later, as Noble was progressing nicely and hit a high of 0.28 on Friday ( just 2 cents shy of the projected target) when out of the blue, it started selling off aggressively. In fact, the selling was so ferocious that it plunged all the way to 0.200 before it staged some rebound to close at 0.225.  A quick search for news showed the reason for its sudden plunge: CNBC: Noble shares take another iceberg on the chin

If we had trailed our stops, we would have exited at a much better price than 0.225. 
Unforeseen things could happen and it is always a good practice to have stop orders in place after we entered a position. Do check with your broker how you can trigger an exit though a 'stop limit' order.

So what now for Noble going forward?  If you had not already staked into the stock, then it is probably better to look elsewhere as this stock has been 'maliciously' targeted by Iceberg Research and it is possible it could succeed. 

However, for the sake of technical discussion, there is a chance that Noble could survive this latest attack as the chart dynamics have changed since the 1st attack by Iceberg 2 years ago.

A look at Noble Group's larger picture (weekly chart dating back from 2014) showed that

Noble was already a weak chart trending down as Iceberg launched its first malicious attack. As the attacks continued throughout 2015 and 2016, Noble's price dropped a whopping 90% to a low of 0.112 in September last year.  

But for the past 6 months, Noble Group was no longer in a downtrend but had been building a steady flat base.  Perhaps at below 20 cts, it has possibly reached a price point where value investors are starting to get interested (see the huge volume accumulation there). Iceberg's attack now might not be that effective in creating fear for long. 

It would be interesting to see if the 'optimistic' technical picture will hold out.  I am still thinking it might not breach the 0.197-0.200 support but if it does, then all bullish momentum bets are off.  

Ausgroup - waiting for a break above 0.062

Lately, a number of oil related stocks have been starting to rise from Stage 1 of the market cycle towards Stage 2.  (See "4 Stages of a Market Cycle: here)

Ausgroup is one such stock that appears to be close to breaking above the near term resistence of 0.062.  If it does breakup eventually with strong volume, then the odds are good that it could reach an initial projected target of about 0.085 (37% upside).

Let's wait and see.

Note: project target are only odds, it could fall short.  Hence I would also trail my stops up as the stock progresses in my favor.

Wilmar - Cut Loss

On Feb 18, I noticed that Wilmar was forming a pennant formation, which is a bulllish continuation pattern. (see this post).  

2 days later on 21 Feb, Wilmar announced a seemingly stellar set of results:

But instead of rising, Wilmar tanked!  So what happened?  

Possible reasons are:

• "sell on news".  Wilmar has already advanced a good amount since it's previous quarter's release and the good news is already factored into the current price. Hence it's time to take profits!

•  Results might be very good but traders were expecting more.  Hence it is actually disappointing. Better take profits and run!

The breakdown of the pennant formation is telling us that it's near term potential isn't great (despite the bullish results announcement).  Hence traders who depended on news to trade will often be too late to the party and found themselves caught on the wrong side of the trade, rushing to buy the good news when astute traders were exiting.  

Even technical traders may find that a trade does not always work out as expected.  But it is ok as long as we follow strict rules to cut a loss quickly.

Exiting a Trade

There are basically 2 reason for a trader to exit a trade:

1. To take profits
2. To cut loss

Both are important (especially #2).  For simplicity, I will explain in the context of a Long trade (ie, buy with the expectations that the stock will rise) for a trader.

Why is cutting loss important?

Cutting loss is part and parcel of the game.  When to cut loss will depend on our trading time horizon and the strategies we employ.  

For many inexperienced traders, taking profits is the easy part.  Cutting a loss is very difficult and often never done (they prefer to wait, pray, and hope for the trade to at least come back to break even).  

Sometimes a stock could simply be acting badly due to some fundamental issues; or the bull run could have ended.  Whatever the reason that the stock acted badly, traders who do not practise loss cutting may end up becoming a "long term investor" holding a lot of stocks with no chance of breaking even in the foreseeable future. The (paper) loss could be so huge that it surpassed the profits they had made during the run up.  

The good news is, cutting a loss gets easier the more we practise it, though it may still hurt (ouch!) but once we cut we are able to move on to new opportunities.  Cutting loss enables us to focus on the good trades, rather than waste our time and energy fixated on the bad ones.  The aim is to have a good winning trade that will make up for several small losses, rather than having several small profits that are wiped out by one big loss.

Trading is about odds, good strategies ensure higher chance of profitable trades but without the right money management (right position sizing, favorable risk/reward ratio, and loss cutting), we may never be very profitable.


How and when to take profits?

The common strategies are:

1. Fixed Profit Target 
    - exiting based on chart pattern projections or based on overhead resistences

       some examples

2.  Trailing Stops
     exit the trade if a stock starts going below:
     - the last pivot low, or 
     - below a rising moving average, or 
     - below a rising trendline

     variations may include exiting when the stock retraces beyond a certain % from the recent high.