Market Technician

Tencent is well-receive by investors, analyst and fund managers. Following table shows the strong convictions by most analysts on Tencent. Source: Reuters. However, market demand and supply situation is suggesting otherwise. Demand is diminishing since late 2017 and supply starts to overwhelm demand beginning Apr 2018. Today, we saw Tencent broke down below significant support HKS$375.00, Sign of Weakness (fall through the ice).  Tencent is relatively weaker than market as shown in our proprietary RS indicator. Fund Flow Index (FFI), which indicates fund flow is below zero, meaning flows are flowing out of Tencent. Lastly MACD continues to trade in bullish manner.  Thus, we are expecting Tencent to breaks further with first objective at HK$340-350 zone. Trading is no different to any other merchandising business as shared by Mr Wyckoff, we all reads the demand and supply conditions and react accordingly.  Distribution zone is simply a zone where deman...

Do you know when  overbought  isn’t OVERBOUGHT? Our next [Effective Technical Analysis] class will be conducted on 30th July 2018,  7-10pm, at SGX Centre.  We will be sharing on reading technical charts effectively and avoid the common mistakes when applying technical indicators.  Join us if you have missed the previous classes. Registration HERE .

Stock price goes through a life cycle of Accumulation, Mark Up, Distribution and Mark Down. In the most basic structure, they are simply different phases of transitions and imbalance of supply and demand. At Accumulation phase, price is transiting from Oversupply to price balance to Demand dominating. Signs of transitions were carefully labelled by Mr Richard Wyckoff about 100 years ago and Wow! continues to apply on current markets. Join us at the next class to learn recognising demand and supply relationship in the markets and identify trading opportunities.  Remember, in the markets, you are simply trading Demand and Supply, nothing else.

Was very glad to be part of the speakers during this year's Singapore Traders Seminar co-organised by Singapore Exchange and CMT Association.  I shared on the subject of momentum in portfolio management and the importance of relative strength in identifying winners and avoiding losers.  Before finishing the event, we had a discussion panel that includes Alvin Kressler, CEO of CMT Association and William Kelleher, COO of ETFConcepts LLC.  The key take-away for the audience was how traders and investors can minimise behavioural bias using technical analysis and its more effective analysing stock price with not just not just using financial analysis but also to include technical analysis. Join us at the next Effective Technical Analysis class, upcoming class  to learn the effective application of technical analysis for both your trading and investment. Cheers.

Supply came in on 3rd July, creating a Japanese candlestick pattern called Bearish Harami. As oil fails to break the US$80 resistance on 2nd occasion means that supply is beginning to dominate. Once supply overwhelmed , price will have the tendency to retest demand at previous support.  Traders who shorted would have gained US$3.00 (+3.9%) from the recognising change the increase in supply. Join us on the next Wyckoff course  and learn how to identify resistance failure and target pricing setting by recognise demand and supply imbalance,  trading in harmony with the smart money !

Laws of Wyckoff help traders to read demand and supply on the markets. We identified the weaken of demand on China Sunsine in late Jun, and forecast that supply will soon overwhelm demand leading to a  Mark Down scenario . Within the next few trading days, supply did came in China Sunsine was being marked down to a low of S$1.28, 3c off our target. It was a +14.57% gain in 5 traders days if a trader has shorted the stock. Join us on the next Wyckoff course and learn how to recognise demand and supply imbalance and identify trading opportunities, following the smart money !

ZTE (763:HK) , trading at HK$14.08 , a company caught between US-China cross fire, saw heavy selling in mid-April 2018 after it violated US trade sanctions. The stock traded sidewa ways for pass 2 months before it saw supply dried up after tested its low of HK$10.96 on 11 July 2018. Today we saw ZTE jumped above across the creek with higher than usual volumes. Thus, we have technical reasons to believe that demand is dominating with immediate upside target at HK$16.00 , previous resistance. Join us in our upcoming Wyckoff Course to learn more about reading market demand and supply with the Wyckoff Method.

DXY DXY fails to break 95 on 3 attempts. Thus, demand is not supportive of a higher DXY. index is expected to retest and retest support at 93. Momentum indicator, MACD, is already bearish and has just witnessed Bearish Divergence. MACD is expected to trade towards its zero line.  Technical view is negated is DXY -0.20% closes above US$95.50.

What to Buy?? Its a hair-pulling experience wondering which stocks to buy (Long) if you are expecting a reversal or trend continuation. Step 2 of our Wyckoff method provide ease to our trading community on stock selection. This is simply because we apply the little rule of Relative Strength (RS) for stock selection. SG market corrected -423pts from its 2018 high and its looking to reverse. Which bank would you choose to trade? UOB, OCBC or DBS? Yes, its UOB. Why? UOB price action is telling us that selling has eased while buying is picking up. From the charts, you could see UOB has stopped hitting new low whereas DBS and OCBC continuing see new lows. Just by using our proprietary RS indicator, boxed in red, community members who have joined our Wyckoff course have simplified this RS measuring and the whole stock selection. On our proprietary RS indicator, you can see that UOB RS is upward sloping while both DBS and OCBC are sill downward slo...

Seldom apply Wyckoff Method on Indexes. However, we seeing distribution characteristics that are hard to ignore on the Korea KOSPI  (Weekly). The characteristics provided technical evidence that the index has completed its Distribution phase and is expected to enter the Mark Down phase. Fibo applied to project downside target objectives. On Marco, as trade war becomes global, it has caused markets to see red in recent times, especially Asian markets. 

Oil (Brent) is seeing a Bearish Harami pattern as price tried to retest US$80.00 level. The failure to break previous resistance coupled with bearish candlestick pattern signals that Oil (Brent) is experiencing lack of strength and we expect price to retrace and re-test trendline at US$75.00. Second downside objective at US$72.00. 

Supporting Observations :  We are observing multiple Distribution Phase signals, providing us with technical evidence that the stock is expected to enter Mark Down phase. Distribution signals include  Uptrend Stride Broken,  Uptrust,  Test,  Weakening buying activity and finally the  HA Colour Change (Momentum)  The key risk to this observations is that the stock's overall relative strength is stronger than STI as per our relative strength indicator.