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STI Broad Picture 2011 – Preservation Of Capital

February 28th, 2011 No comments

 

STI Chart 14 Mar 2011
STI Chart Updated As Of 14 Mar 2011

Chart comments: STI dipped below its 200 days moving average twice recently, casting doubt on the sustainability of its uptrend since Mar 2009.

STI Broad Picture 2011 : After the sub-prime crisis in Oct 2008, STI was dragged down from a peak of about 3900 (estimated, same applies for all STI and other numbers below) to a low of 1480. STI did a rapid recovery of about 60% (taking the peak and valley difference as a range) in 2009, and another 12% in 2010, making a total recovery of 72% – and hence it is likely to be now in its late economy cycle recovery.

It is therefore, my personal opinion that, going forward, STI’s, is likely to rather choppy (i.e. volatile). Hence, except for value stocks (and lowly geared) that are bought at the right price and with money that is prepared to be set aside for long term, for other stocks (non blue chips and penny stocks), the more appropriate approach is to be geared towards trading, i.e. be very selective about your entry point (e.g. only after market’s heavy correction) and make sure that there’s strict cut-loss strategy in place. Break down your investible amount into manageable size and phase-in your positions, and be prepared to withdraw positions quickly when things aren’t right. Lastly, do take note that while analyst reports attempt to correctly predict the price of companies’ stocks, it is not likely / impossible for these reports to effectively capture unforeseen economic (eg. currencies / sub prime crisis) / political (eg. recent middle east, Libya unrest), natural disasters (e.g. Japan massive earthquake / tsunami – updated 15 Mar 11) or even individual company’s circumstances.

I therefore urge the exercise of caution and with first focusing on the protection of capital, and then, the growth of it with modest return and if, by stroke of luck and some skill, excessive return to your capital / portfolio – at each juncture remembering the all important defensive approach of first preserving your hard earned capital.

STI up 1.13 per cent (33.69 po…

February 25th, 2011 No comments

STI up 1.13 per cent (33.69 points) mid-day at 3,006.77 points. Abt 3 gainers fr 1 loser.

STI Charting Nearing 200 Days EMA As Support

February 21st, 2011 No comments

STI 200Days Exponential Moving Average (EMA) Chart 21st Feb 2011

STI 200Days Exponential Moving Average (EMA) Chart 21st Feb 2011


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