Table 1_Top five stocks with the highest total potential return 10 Nov 17

Ernest’s market opinion (10 Nov 17)

Dear all STI has closed at 3,420, in line with my view that STI’s chart continues to be bullish (refer to my technical write-up on STI HERE), despite the elevated RSI.   1. Equities – still favour over bonds over 3-5 year time frame but… Personally, notwithstanding the market rally, I believe that over the long term, equities are still likely to outperform bonds and cash. Having said that, I am not telling all my clients to plough everything into stocks NOW, given that in the near term, there may not be significant catalysts to push the market higher by […]

STI chart as of 27 Oct 17

Ernest’s market opinion (27 Oct 17)

Dear all STI has closed at 3,386, a fresh 29-month high. Some of you who have been less than 30% invested in their portfolios and have not added more exposure in their equities portfolio last month are wondering whether you have missed out of the rally. Should you continue to chase this? Read on for more.   S&P500 last closed 2,581 S&P500 is on a strong uptrend with all the exponential moving average (“EMA”) trending higher. ADX closed at 29.3, amid positively placed DIs, indicative of a trend. RSI closed at 70.7. This is not extremely overbought, relative to past […]

S&P500 chart as of 18 Aug 17

Ernest’s market opinion (18 Aug 17)

Dear all Our STI has broken a one-month trading range of around 3,288 – 3,348. Where will STI and the other indices go from here?   S&P500 last closed 2,426 Based on Chart 1 below, although 20D exponential moving average (“EMA”) is trending lower, the other EMAs, namely 50D, 100D and 200D EMA are still trending up. RSI closed at 37.2. Since 7 Nov 2016, the lowest RSI was around 35.9 on 10 Apr 2017. Although the directional indicators (“DIs”) are negatively placed, ADX is still at a low 12.2 which is indicative of a trendless market. My personal view […]

Table 1_Geo Energy vs Golden Energy

Golden Energy – 4th largest in Indonesia but share price lags Geo Energy by a mile! (27 Mar 17)

Golden Energy (“GEAR”) has slumped 21% from $0.655 on 12 Dec 2016 to $0.515 on 27 Mar 2017. Compare this with a 47% rally in Geo Energy’s share price over the same period. Moreover, GEAR has slumped 10% post its results notwithstanding the strong set of results. Why is this so? I have managed to fix an exclusive 1-1 meetup with Mark Zhou, Head of investments, GEAR (“Management”) to find out more about the company’s business and prospects.   Key takeaways from the meetup Bullish on FY17F Management continues to be bullish about its outlook. Based on Chart 1 below, Indonesia, […]

STI chart as of 24 Mar 17

Ernest’s market outlook (24 Mar 17)

Dear all, After 109 trading days, S&P500 finally staged a 1% drop on 21 Mar 2017. Is this the start of a correction? Let’s take a look at the charts.   S&P500 Just to recap what I have mentioned on 10 Mar 2017 (see HERE), I wrote “All the EMAs are rising steadily. Since 8 Nov 2016, S&P500 has not traded below its 20D EMA for more than one trading session. Amid positively placed directional indicators (“DIs”), ADX has risen from 34 on 24 Feb 2017 to 38 on 10 Mar 2017, indicative of a trend. RSI has weakened from […]

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Laggard stocks: Chart outlook for ISOTeam, Midas and Sapphire (17 Mar 17)

Notwithstanding the rally in the equity market, there are some stocks which continue to be laggards and are consolidating around their key support areas. If the market continues to stay buoyant, it may be a matter of time before funds rotate to the following laggard stocks, namely ISOTeam, Midas and Sapphire.   1.ISOTeam closed unchanged $0.390. Day range $0.390 – 0.395. Ave analyst: $0.600 ISOTeam has been testing the support area of around $0.375 – 0.390 for the past four days. Short term exponential moving averages (“EMA”) are moving lower with 20D EMA crossing below 50D EMA. It is fortunate […]

STI chart as of 13 Jan 17

Ernest’s market outlook (13 Jan 17)

Dear all, STI performs to my expectations as it heads towards 3,040 (my eventual technical measured target price which I mentioned previously). What’s next? For the charts analysis below, you can cross – reference to my market outlook sent on 6 Jan 17 HERE. (Actually, my bi weekly market update should be done next week. However, I noticed that the market seems to be reaching some near-term potential resistances. Hence, I decided to do a market update. Due to time constraints, I did not put in Hang Seng analysis for this issue)   S&P500 Based on Chart 1 below, it […]

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Ernest’s market outlook (6 Jan 2017)

Dear readers, Two weeks ago, I mentioned that although Hang Seng is in a downtrend, it may rebound as oversold pressures build. Hang Seng jumped 928 points in the past two weeks. What lies ahead?   S&P500 Index Just to recap what I have mentioned on 23 Dec 2016 (see HERE), I wrote “S&P500 is consolidating its gains for the past two weeks. It continues to be on a clear uptrend amid rising exponential moving averages (“EMAs”). ADX continues to rise from 36 on 9 Dec 2016 to 39 on 23 Dec 2016 on the backdrop of positive placed directional […]

chiwayland-chart-as-of-27-dec-16

CWG chart looks strong, despite price consolidation (27 Dec 16)

CWG International Limited (“CWG”), former Chiwayland, closed unchanged at $0.156 on 27 Dec 16. Based on Chart 1 below, notwithstanding the recent price consolidation, all its exponential moving averages (“EMAs”) are still rising strongly, indicative of an uptrend. OBV is at elevated levels despite the price consolidation (i.e bullish). Amid positively place directional indicators, ADX is around 25, indicative of a trend. RSI closed at 56. Although the usual benchmark for RSI’s overbought level is around 70, it is noteworthy based on historical records, its RSI can reach 90 before profit taking occurs. All in, the chart looks positive. A […]

sti-chart-as-of-23-dec-16

Ernest’s market outlook (23 Dec 16)

Dear readers, Two weeks ago, I mentioned that there is likely to be profit taking on the STI. STI has since fallen 85 points, or 2.9%. What lies ahead?   S&P500 Index Just to recap what I have mentioned on 9 Dec 2016 (see HERE), I wrote “S&P500 is on a clear uptrend amid rising EMAs and ADX, on the backdrop of positive placed directional indicators (“DIs”). RSI closed around 77 on 9 Dec 2016. This is overbought and at a 3-year high. Indicators such as OBV, MACD and MFI continue to exhibit bearish divergence with price. Although bearish divergences […]