~ Bertrand Russell
Despite no official announcement or news release, at least not that I could find, today saw extreme opposing movements for two stocks I'm vested in. Starhub, our second largest mobile service provider, fell drastically, while Singpost rocketed upwards.
It seems that the bulls have decided to finally turn up at Singpost leaving Starhub at the mercy of the bears.
For days now, it seemed that both Starhub and Singpost were downtrending and that there were expectations for them to go even lower (Refer to Singpost Rebounding Strong, Singpost - Downtrend to Continue?, and ASSI's Starhub, CapitaMalls Asia and CitySpring for previous discussions).
To get a more recent picture, lets turn to our charts.
Starhub
We can see clearly that Starhub is downtrending. Its two previous support of $2.60 and $2.53 which I was hoping for them to hold have been smashed through. Today's long black candle as well as the negative sentiments of all the indicators doesn't bode well for Starhub. Worse yet, ADX looks like the trend is starting to strengthen. To top this off, it has even broke through it's downtrend channel to form what looks like the beginning of an even steeper fall. Not good. Not good at all. I expect to see more selling come Monday. Next support is at $2.48 and then at $2.41 which happens to also be the 200 day moving average. It is possible that prices will hit the 200dma seeing that the correction has sent a couple of other stocks down to its 200dma, Singpost included.
Personally, I'm not selling my stake as I bought into Starhub to add to my income portfolio (not for capital gains). Also, I entered at the last correction of a price of $2.23. Plus I've collected two dividends which brings my price down to $2.13 so I think I'm pretty safe for now at least. Will be keeping an eye out for any new negative developments that may cause me to rethink holding on to this.
However those looking to buy into Starhub for dividends, can use this selloff as a chance to get vested into a stock with a relatively high yield. Not just yet though. A word of caution, please wait for evidence of a rebound or stabilization in price before doing so. Catching a falling knife is no fun, no fun at all.
Singpost
Anyone who had followed the charts on the previous days following the start of the correction would have noticed that the prices bounced off the 200dma twice, one at $1.12 and at $1.13, forming a double bottom indicating that there was demand for the stock and likely to push prices back up. Today was that day.
Singpost broke out of its downtrend today with an amazing leap upwards, crashing through two resistance at $1.19 and $1.20, heading straight to test the next resistance at $1.23 where it closed today. With today's high buying volume and all indicators favouring price heading higher, it most likely will break above this to test the last major resistance at $1.24.
To anyone who bought the stock at the support prices or for the last couple of days before today's blast off, well done!
Cheers,
~K
wow. any idea why starhub fell so badly at high volume today? got some bad news is it?
ReplyDeleteHello Isaac! Great to know you're still reading my blog. =)
ReplyDeleteWell, there isn't any bad news that I can dig up so honestly I've no idea the actual reason for the selloff.
However, I was expecting a selldown because its PE was rather pricey when compared to its peers, at 14+ compared to M1 at 13+ and Singtel at 12+ and was expecting traders to take profit soon.
Also, another reason may have been caused by a reflexivity reaction as termed by George Soros, where our perception will cause a reaction which may affect our perception which will cause another reaction etc. So the selloff may be people selling in panic for no concrete reasons other than other people selling in panic due to the downtrend. As such, this may just be another random walk.
We'll just have to keep watch to see if anything develops in the news the next couple of days.
Cheers,
~K
Hi Kay,
ReplyDeleteHaha, I bought it nearly a month ago at 1.15 :)
http://bullythebear.blogspot.com/2010/11/singpost-chart.html
Going to sell it on monday to get slightly more than a year of dividend in advance :)
Ooohh, congratz LP. Wouldn't be getting the advance dividend for Christmas presents perhaps? heh
ReplyDeleteThe hilarious thing was that I thought you were talking about Starhub for awhile and then realized otherwise heh.
I bought at $1.13. Once I saw Singpost snapping up their shares, I bought in as well. I find that quite a reliable way of telling when it's safe to buy generally. I'm holding still cause I like the constancy of the company. They're also in my dividend portfolio in my quest of acquiring passive income as I try to win my financial freedom.
Good luck on Monday LP! =)
~K
Hi kay,
ReplyDeleteWill do a linkup with you :)
I'm actually planning to trade singpost over the long term :) I'm only holding it if I can get it near to $1, so I guess I'll create my own dividends, so to speak.
This would be my 3rd round :)
Hey LP,
ReplyDeleteThat's great to hear.
3 rounds...wow...I'm envious haha. Well good luck on that. All the best. =)