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.