STI retracement


STI-

Judging by price action, notice that the bar on 6th april is narrowing, indicating a slowdown in momentum. STI volume is also declining, a classing bearish divergence. A retracement is likely, with the first support at 2925 and the next support at 2885. The 2885 region is a very strong support and should there be a near 90 pt correction from here to touch 2885, this will be a good point to load up. It is however vital to loadup after a bar closes above 2885 upon touching.

Falconenergy is facing resistance at 0.685, if it breaks, i will take profit and wait for the next round of rally. -Sold with profit

-Update 14April

STI continued to show strength despite the earlier weakness. Now that the 3000 mark is broken, it is hard to say for sure. However, the irrational exuburance is forming in the markets. While some say that it is risky in terms of risk to reward ratio because of the market being highly overbought, this is on the other hand the portion where the market spikes up the most.

The breaching of the 3000 support is crucial as many traders were looking to short the market on every weakness for the past week. I posted the STI chart drawing the conclusion that a retracement was imminent, but the reverse happened. The shortists were panicking to cover their positions when every trade turned red. After squaring their position, will they change their stand upon seeing the market trend upward further?

The market breaking a higher high is a trigger for long. The 2 stocks on my watchlist are Novo and GMG. Coincidentally, both are a buy above the resistance of 0.25. With this being said, i am leaping into the fray, with my stoplosses in place. Novo-0.23, GMG-0.225

Novo Dual listing



Novo is proposing a dual listing similiar to Z-Obee, which showed a spectacular run over a period of 6 months. Novo has completed the first phase of share placement in preparation of achieving 25% public float for submission to HKSE. The next milestone is to look for the approval by SGX.

The timeline comparison shows that a dilution is expected immediately after the issue of new shares, but a high made that is above the pre-issue of new shares will represent the stock is ready to move higher.

The target of 0.28 was not met. On technical basis, there is no entry yet. A break above 0.28 (all time high) will mean that the placement shares have been fully absorbed and ready for the next move upwards.