STI Bounces Up

Stochastics signal lines crossed today as expected in Thurday's post, STI - Heading for the Next Leg?,  and the STI has bounced up higher than yesterday's close. This bodes well that price is likely to find its way back to the 50day moving average by next week, before heading higher still.

Anyone looking into investing into the STI ETF can consider nibbling into the security. However at a high of 3800 in 2008 before the crash, the current 3200 leaves about another 15% upside. This is if it heads back to its previous high. Should it exceed this, my estimate is that it'd have a maximum of 20% upside to go. Pure guesswork that but that said, PE ratios would be expensive by then too. So it'll be more likely for stocks to come back down instead of rising further. Of course I know that the euphoria  (euphemism for madness) of the crowd could drive it higher still, so I'm not wagering the house on this.

However, as the blue chips have all climbed considerably since the downturn, the best returns now lie in the penny stocks for they normally rise last in a bull market. Here's where the gems are and also where the most volatility lies though so be warned. Have a good buy and more importantly, sell plan. Investigate your company properly. Do some thorough research to prevent yourself being scared out of the stock. This recent correction is a good time to start shopping for some quality buys.

Best of luck everybody!

~K

STI falls 1.15 point, or less than 0.1%, to 3,158.08 at closing
Friday, 26 November 2010

© 2010 - The Edge Singapore

STI - Heading for the Next Leg?

Success is how high you bounce when you hit bottom. ~ General George S. Patterson

Seems that most stocks on the SGX are bouncing off their 50day moving average. The STI is displaying similar traits. Although overshooting a little, it looks like the bounce back up is coming soon. Furthermore, Stochastics already seemed to be turning up as well from oversold territory and likely to intersect. 

A comparison to other countries show that most of them are displaying similar bouncing characteristics. For example:

US

S&P 500

Dow Jones

Nasdaq

Hong Kong

Hang Seng

China

Shanghai Stock Exchange

My take: With the upturn of all these countries, it does look like stocks here are likely to turn upwards soon, possibly by next week, and thereafter head higher. So if you're looking to buy stocks, you had better do so soon when the next entry price presents itself before the correction's over.

Good luck!

~K

STI gains 0.7% to 3,159.23 at closing
Thursday, 25 November 2010

© 2010 - The Edge Singapore