Review of trades this week (5-9 May 2008)

1) COSCO Entry price	3.11
30 day ATR	0.22
1.5X ATR30	0.33
Cut loss stop on 1.5ATR30	2.78
Recommended cut loss	0.355
Loss on recommended cut loss	-701.7552702
Target price	3.92
Profit on target price	1570.163065
Reward/risk ratio	2.237479548

COSCO hit my trailing stop of 3.29.

Sold COSCO 3.29
Profit = $300

2) First Resources (bought 17 April 2008))

Long
Entry price 1.03
30 day ATR 0.09
1.5X ATR30 0.135
Cut loss stop on 1.5ATR30 0.895
Recommended cut loss 0.885
Loss on recommended cut loss -1517.878899

Target price 1.38
Profit on target price 3414.575381

Reward/risk ratio 2.249570361

First resources as expected rose after oil prices made their rally. However I was a bit uneasy with this rise for a few reasons.

1) Oil prices have risen way too fast and too steeply ( a correction looks to be coming)
2) USD$ was supposed to drop after the Fed rate cut and hence lead to oil prices going up. USD$ has actually strengthened while oil rose. This leads me to believe the high oil prices are due to traders' actions and speculation on certain news driving prices beyond their true demand/supply chain value.
3) First Resources increase was not due to any share buy back. Which leads me to admit I was wrong in my assumption that First Resources wanted to increase their share price. Looks more likely they will be there to lend support to the stock price counter to the downside rather than supporting it on the upside.
4) Global focus is now on oil prices, food prices and inflation which will soon be tackled.

Hence I decided to set a profit protection level of 5.9% when the rally in First Resources reached above those levels. As a result I sold at 1.10 when they retreated slightly. On hindsight I could have added another 5% return if I had just waited for another hour for the crude palm oil futures to trade a bit more.

In any case I'm happy with the 5.9% return.

Sold on 8th May 2008 at 1.10
Profit $613

2) Singtel (Bought on 9th May 2008)

Long
Entry price	3.66
30 day ATR	0.09
1.5X ATR30	0.135
Cut loss stop on 1.5ATR30	3.525
Recommended cut loss	3.57
Loss on recommended cut loss	-231.2547714
Target price	3.89
Profit on target price	406.476691
Reward/risk ratio	1.757700775

Knowing that the market might be taking a downturn after hitting resistance levels, but not totally sure, I was looking at going into the defensive stock options.

Namely, Singtel, SPH and Starhub. These 3 stocks have been trading in distinct channels even during the Oct 2007 to March 2008 drop in the broader markets. Use of RSI to trade along with the levels within the channels looked to be a possible trading idea.

An analysis of the 3 stocks in terms of PE ratios and P/NAV ratio showed the following

SPH :
PER = 16.7
P/NAV = 3.48
PER x P/NAV = 58

Starhub:
PER = 16
P/NAV = 4
PER x P/NAV = 64

Singtel:
PER = 15.3
P/NAV = 2.875
PER x P/NAV = 44

Do note that Singtel's figures are not based on latest figures as they will be announcing results on 14 May 2008. However between the 3 stocks it looks like Singtel's valuations are still the most attractive.

Chart wise the support levels for Starhub were at 2.96 and 2.75, SPH at around 4.25 and for Singtel 3.60. Hence the price levels showed that Singtel was much closer to the support level. All 3 were in oversold RSI region.

Hence decision was made to queue for Singtel at 3.66 based on the ATR30 and market depth support levels.

I managed to get my limit order filled at 3.66 around 4pm.

However news about the Indonesian district court ruling plus a drop on wall street will cause the stock to fall further on Monday. It is possible that I may have to cut losses. A decision will have to be made whether to do that versus holding the defensive stock. I will have to research further on this over the weekend.

Bought Singtel 3.66
Last done price 3.71
Unrealised profit = $40


Total to date trade summary :

Up to date realized profit/loss = $2242 + $300 + $613 +$280 (dividend for COSCO) = $3435

Unrealized profit/loss = $40