Saturday, April 26, 2014

Weekly Chart Update 25/4/2014

The US Market
This week we see that the US market S&P 500 did not cross above the 1st resistance of 1890, and it closed the week at 1863 which is just slightly above the 20 day and 50 day moving average. Next week we shall see the market testing these moving averages as support levels, if break below 1860, the next support shall be 1800. Buckle up your seat belt, it is going to be volatile next week!

The STI market has been performing well since it broke out from the bearish chart pattern end of March. It would be in a stronger position if it can consistently hold above the 3225 level. My favourite sectors are Plantation, Oil and Gas, Technology, Telco, Banking and some property stocks. Buy in stages at cycle low months like February, May, August and November. We never know when is the bottom, but if we buy in stages it can help to eliminate some of the emotional mistakes of investing. My approach for the STI is long term hold with a duration of minimum 2 years. Since its a long term hold, I'm not in a hurry to invest, I would take my time to look for value buy.

As for our local market, our market did not go through a down cycle like the STI since last year May. Hence, we may need to take extra care when investing here. In general, in a new bull, large cap stocks are moving fast, when the bull starts to mature, large caps are slowing down but the small caps are moving. However, when you see that both large caps and small caps are lacking momentum, you should know what to do. Support at 1840 for next week.

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