SEMBCORP
Sembcorp had been consolidating for the early part of the week and testing the 4.15 breakout level. There is a gap from 4.71-4.60 and from 4.98-4.97. Necktie crossover of 25, 50 and 200 day moving averages corresponds to the HCR.
Immediate resistance is likely to be 4.35 (corresponds to 25 day moving average.
I made an aggressive entry at 4.16 on 27 March 2008 when it broke the 4.15 high of the consolidation phase.
The close on 28 March 2008 was 4.20.
Rationale :
Entry price : 4.16 (breakout of consolidation)
Cut loss price : 3.80 (15 month low) (ATR = 0.22. 1.5XATR = 0.33. 4.16- 0.33 = 4.83)
Cut loss per 1 lot = -$388 (-9.2%)
Target price : 4.71
Reward per 1 lot = $518 (12.4%)
Reward/risk ratio = 1.33
Number of lots bought : 2
Current paper profit = $12
Interestingly on the fundamentals front, on 28 March, SCI announced that they had signed a joint venture agreement with Zhangbao Industries Co today to build, own and operate an industrial water recycling facility in the Zhangjiagang Free Trade Zone in Jiangsu Province, China. TA tells you when. FA tells you why after the price has already moved.
YangZiJiang
YZJ made a bottom of 0.78 on 20 March 2008. The next trading day on 24 March 2008 it closed bullishly at its high of 0.83. COSCO also made good moves up on 24 March and thus attention was drawn to YZJ which has a similar chart pattern. The plan was to enter at 0.85 which would be the high of the 3 day channel prior.
YZJ has gaps at 0.925-0.92, 1.05-1.04 and 1.15-1.14. HCR is 1.20-1.40. Fibonacci levels are as seen on the chart.
I entered YZJ on 25 March 2008 at 0.85 as planned. The closing price on 28 March 2008 was 0.985. I sold half of my trade at 0.90 on 26 March 2008 to take some profit. Immediate target is 1.05 but I will reconsider and see if 1.15 can be reached based on the momentum when it hits 1.05.
YZJ has breached the 25 day moving average and the 1.15 target is right at the 50 day moving average so this target is not out of reach.
For the next few days I would be watching the 1.00 resistance level (round number resistance and downwards sloping trendline resistance). A strong break of this level would be a bullish signal.
On the fundamentals front, on 28 March after market close, YZJ announced that they had entered into an agreement to acquire a stake in Jiangsu New YangZi Shipbuilding company.
Rationale :
Entry price : 0.85 (breakout of prior 3 day channel, just off the all time historical low of 0.78)
Cut loss price : 0.78 (all time low) (ATR = 0.07. 1.5XATR = 0.105. 0.85-0.105 = 0.745 -->choose all time low good enough)
Cut loss price per 10 lots = -$757 (-8.9%)
Target price : 1.05
Reward per 10 lots = $1932 (22.7%)
Reward/risk ratio = 2.56
Number of lots bought : 10
Sold 5 lots on 25 March 2008 at 0.90 --> profit = $219
Number of lots left : 5
Last closing price : 0.985
Current paper profit = $642
Realised profit/loss for week 24 - 28 March 2008 = $218
Up to date realised profit/loss = $218 - $738 (last week) = -$520
COSCO
COSCO is a stock I bought at $3.40 about 2 weeks ago when I didn't know TA. I knew about how gaps are usually covered but knew nothing else.
Looking at it now, gap at $4.02 - $3.90. Coincides with 61.8% Fibonacci retracement level. $4.02 is thus the target.
COSCO closed above the 25 day moving average on 28 March 2008, mirroring YZJ's move. And similarly the 50 day moving average level would be at 4.02. So the target is within reach. Amazing how similar the 2 ship related counters moved and closed according to their charts.
On the fundamentals front, COSCO's Vice President had said in a bloomberg interview that they had plans to increase their stake in COSCO Shipyard Group by 19.1%. Several directors had also bought COSCO shares from the open market at prices between 3.32-3.418 this week.
COSCO was also planning road shows for QDII funds.
Rationale :
Entry price : $3.40 (old buy 2 weeks ago)
Number of lots : 6
Target price : $4.02
Profit at target price : $3538
Last close : $3.73
Current paper profit = $1805
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