Review of trade this week (17 Aug to 21 Aug 2009)

I told myself I'd come back to trading breakouts only when the 200 day moving average confirmed an uptrend. So I'm back.

Wing Tai

Original idea was

Long
Entry price 1.83
30 day ATR 0.07
1.5X ATR30 0.11
Cut loss stop on 1.5ATR30 1.73
Recommended cut loss 1.49
Loss on recommended cut loss -703.54

Target price 2.3
Profit on target price 910.72

Reward/risk ratio 1.29



Flag pattern breakout.

Flag pole 1.85 - 1.38 = 0.47

But as the stock pulled back, my breakout stoplimit order never got triggered. Until 20 Aug (Thurs)

So I entered at 1.69 instead of 1.83. Happened to also be a breakout of the high of past 3 days. Recovering from oversold RSI as well. Target is now 2.14.

See how it goes.

Review of trades this week (23-27 June 2008)

I came back from my overseas trip last week and went over the charts. My initial feeling was to look for stocks to short. But going through the charts I just saw the very oversold market situation going into the FOMC meeting and thought it was better to bet on a short term bounce.

My time frames for trading are getting shorter. This has to be the case if trading is to fit into my future plans.

Anyway here's a review of my trades this week.

1) COSCO
BOUGHT 2 lots 15 May 2008

Long
Entry price 3.51
30 day ATR 0.2
1.5X ATR30 0.3
Cut loss stop on 1.5ATR30 3.21
Recommended cut loss 3.23
Loss on recommended cut loss -607.7810732

Target price 3.89
Profit on target price 707.540068

Reward/risk ratio 1.164136396

Last done price = $3.22
Paper loss = -$634


This trade should have been cut out long ago during the time I was in Canada. Anyway I'm probably going to just hold this counter as it has not had any real bad news and is holding up pretty well so far. $3.10 seems to be the support. Volatility in this counter has also come down tremendously so this is not a counter on the top half of traders' radars anymore.

As a result I've decided to adopt a buy and hold strategy for this one. I'm still betting oil prices to have a sharp correction and stocks like COSCO are bound to benefit. There are many "good skeletons" not out for this stock. Eg their proposed increase in stake of the shipyard, new orders etc. When those do come out it will be positive.

We'll have to wait and see.

2) UOL

Bought 3 lots 23 June 2008 at 3.42

Long
Entry price	3.4
30 day ATR	0.08
1.5X ATR30	0.12
Cut loss stop on 1.5ATR30	3.28
Recommended cut loss	3.24
Loss on recommended cut loss	-550.6082328
Target price	1.63
Profit on target price	824.500233
Reward/risk ratio	1.497435352

One of those really oversold counters that had broken support levels. RSI super low and UOL seldom stays that oversold for too long. Remember I'm talking short short term here. Not talking about trends. Trend is still down. But my tools make me feel more comfortable doing long trades at the moment.


Again looking for rubber band trades.

Anyway sold it off at 3.51 on 26 June 2008.

Sold 3 lots at 3.51
Profit = $185

3) Wing Tai

Bought 5 lots (should have bought 10!) at 1.49 on 23 June 2008

Long
Entry price	1.5
30 day ATR	0.065
1.5X ATR30	0.0975
Cut loss stop on 1.5ATR30	1.4025
Recommended cut loss	1.4
Loss on recommended cut loss	-551.396555
Target price	1.63
Profit on target price	594.5271665
Reward/risk ratio	1.078220676

Similar picture as UOL but even more oversold and below NAV! Was always due for a bounce going into the FOMC meeting.

I also look at these indicators to look for rubber band trades.

Sold 5 lots on 26 June 2008 at 1.57
Profit = $337

3) Allco Reit

Bought 10 lots at 0.78 on 25 June 2008

Long
Entry price	0.78
30 day ATR	0.02
1.5X ATR30	0.03
Cut loss stop on 1.5ATR30	0.75
Recommended cut loss	0.75
Loss on recommended cut loss	-354.232227
Target price	0.87
Profit on target price	841.514265
Reward/risk ratio	2.375600527

Allco Reit is a counter my good friend and trading buddy has done a lot of research on and his assessment is that the stock has very very good fundamentals (he was a FA guy before he turned TA after Chinese New Year)

Anyway I've been watching this stock for a LONG time now. There was the news that the parent company Allco was in financial difficulty and the stock tanked in January. And there was the news that they might have difficulty refinancing their loans in March. And in May there was the news about their Moody's rating drop. And each time the stock just went up again. This is one of those quiet quiet stocks which are not trader's cup of tea. But I've been watching it for so long and seeing my good friend make money that I decided once and for all to just join him. In any case it's a REIT! REITS are going to be good during bear markets. I won't go into the fundamentals but briefly Allco Reits owns buildings with office rentals. And rental rates have gone up (although won't be going up so soon). But look at the Allco chart and you know how far it has dropped. At most just collect dividend. REITS will be defensive counters and Allco is one of those quiet ones that has little or no coverage. Shhh...dun tell too many people ok?

In any case I'm quite confident we'll see a bounce for Allco Reit as well. In the POEMS CFD this is a long only CFD. So not so much on shortists' radars. It is also trading below NAV liao.

Can lah.

Last closing price 0.76
paper loss = $-263

Total realised profit/loss = $3565 +$185 + $337 = $4087
Unrealised profit/loss = $-634 - $263= $-897

Review of trades this week (16-20 June 2008)

I just returned from my trip to North America on 19 June 2008. I had not been monitoring the market much but have just realised that the major indices have all broken key support levels and are about to test the lows of Jan and March 2008.

I'll need to spend some time analyzing once again. Got to look at the Elliot Wave count among other things. But I decided to take some profit off the table on Singtel first.

1) 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

Sold on 20 June 2008 at 3.76
Profit = $130


2) COSCO
BOUGHT 2 lots 15 May 2008

Long
Entry price 3.51
30 day ATR 0.2
1.5X ATR30 0.3
Cut loss stop on 1.5ATR30 3.21
Recommended cut loss 3.23
Loss on recommended cut loss -607.7810732

Target price 3.89
Profit on target price 707.540068

Reward/risk ratio 1.164136396

Last done price = $3.34
Paper loss = -$396

Total realised profit/loss = $3435 + $130 = $3565
Unrealised profit/loss = $-396

Review of trades in week 12-16 May 2008

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

Last done price 3.71
Paper profit = $40

2) COSCO
BOUGHT 2 lots 15 May 2008

Long
Entry price 3.51
30 day ATR 0.2
1.5X ATR30 0.3
Cut loss stop on 1.5ATR30 3.21
Recommended cut loss 3.23
Loss on recommended cut loss -607.7810732

Target price 3.89
Profit on target price 707.540068

Reward/risk ratio 1.164136396

Last done price = $3.56
Paper profit = $42



COSCO broke out of a 7 day channel and also above the downward trend line from 2 April 2008.

I will be leaving for a holiday on 4 June 2008 and will return on 19 June 2008. As a result I am not too keen to enter into trades where I am not familiar with the stock fundamentals. I also have a preference for defensive counters at this time due to this as well as the uncertainty of the markets.

June 25 will be the FOMC announcement and I would prefer to wait till then before deciding what my next move will be. Position sizing will be the key after 25 June 2008. So my trading record will be a lot quieter for the next two weeks. I am looking to buy Starhub at around 2.80. Defensive counters.

But I think the shipping sector looks to be strong.

Analysis of trades over past 10 weeks

I started trading about 10 weeks ago. The market was still in a downtrend and I started with shorting stocks in the first week. The very next week I switched to a long position on most stocks. And now it appears the trend has changed again for the short term.

Hence I felt it was a good time to take stock and analyse my trading performance.

Here are the stats below

By % gain/loss

<-10%	-5 to –9.9%	-0 to 4.9%	+0 to 4.9%	+5 to 9.9%
Ferrochina $7200 5 lots buy $1.44 sell 1.30 loss $755 Loss 10.4%	Shorted Wilmar $10470 3 lots Sell 3.49 Buy 3.80 Loss $1048 Loss 9.15%	Sembcorp $8320 2 lots buy 4.16 sell 4.17 Loss $47 Loss 0.5%	Shorted Golden Agri $8400 10 lots Sell 0.84 Buy 0.80 Gain : $310 Gain 3.86%	YZJ $4250 5 lots buy 0.85 sell 0.90 profit $218 gain 5%
			COSCO $7480 2lots short 3.74 buy 3.65 profit $91 Gain 1.6%	First Resources $10300 10 lots buy 1.03 sell 1.10 profit $613 Gain 5.9%
			Fibrechem $8050 10 lots buy 0.805 sell 0.815 profit $30 Gain 0.4%
			COSCO $6220 2 lots buy 3.11 sell 3.29 profit $300 Gain 4.9%

Quantum of gains/losses

	Gains			Losses
	$310			$47
	$91			$1,048
	$30			$755
	$300
	$218
	$613
	$1,602
	$929
	$912
Total	$5,005	%		$1,850	%
N	9	75		3	25
Average	$556.11			$616.67
Net Profit	$3,155

Dollar Grouping
Gains				Losses
Range	Number			Range	Number
Scratch under $100	2			Scratch under $100	1
$200-$300	3			$200-$300	0
$400 - $600	1			$400-$600	0
$700-$900	2			$700-$900	1
$1,000	0			$1,000	1
$1,600	1

Trading analysis
Using multiples of $100
	Gains					Losses
Payoff		Probability	Positive Expectancy		Payoff		Probability	Negative Expectancy
1 to 1	3	0.333333333	0.333333333		1 to 1	0	0	0
2 to 1	1	0.111111111	0.222222222		2 to 1	0	0	0
4 to 1	1	0.111111111	0.444444444		4 to 1	0	0	0
8 to 1	1	0.111111111	0.888888889		8 to 1	1	0.111111111	0.888888889
10 to 1	0	0	0		10 to 1	1	0.111111111	1.111111111
16 to 1	1	0.111111111	1.777777778		16 to 1	0	0	0
Total			3.666666667					2
Net Expectancy	1.666666667
	Cyke's System
Expectancy	Opportunities over 10 weeks	Total
$1.67	9	$15.03

In summary

Trading analysis for Cyke over past 10 weeks
Expectancy = $1.67
Opportunities over 10 weeks = 9
Total = $15.03

Average gain per trade = $556.11
Average loss per trade = $616.67

% return on trading capital used over 10 weeks = 9.8%
% return on total trading capital available over 10 weeks = 6.87%

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

Trend following

Just did a bit of a review over the past 8 weeks.

Found that I did better buying near bottoms or breakouts near bottoms than on breakouts at highs.

Was talking to a few traders and they highlighted to me a few things.

Hence some additions to the trading rules for myself

1) Look at the 200 day moving average. If it is sloping down, long term trend is down. If it is sloping up, long term trend is up. When buying or shorting breakouts near highs or lows respectively it must have the 200 MA in the same direction.

2) Look at the 25 and 50 day moving average for short to intermediate term trends. Trade according to this shorter term trend direction. However if the 200 MA direction is opposite to the 50 MA, then do not trade on breakouts up or down. Instead buy or short on dips or rebounds respectively.

3) As the 25 and 50 MA start to move in the opposite direction to the 200 MA and are starting to converge, use of RSI is sensible.

Review of trades in week 28 April - 2 May 2008

I am left with 2 counters that I am actively trading at the moment.

1) 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

The Board of Directors of First Resources Limited ("the Company") are pleased to announce that at the Annual General Meeting (“AGM”) and Extraordinary General Meeting (“EGM”) of the Company held on 29 April 2008, all resolutions relating to matters set out in the Notices of the AGM and EGM were duly passed.

So the share buy back mandate resolution in the EGM was also passed. So far there have been no announcements from First Resources about any share buy back action. However I suspect that with this resolution in place the stock may have some support.

Many market watchers are talking about the rise in the USD$ and also the retreat in oil prices as well as commodities. Most are waiting to dump their commodity based investments.

Personally I do not see a crash in commodities going forward. A correction might be in place at the moment but as long as macroeconomic conditions remain the way they are with the US in a mild or no recession, China still growing at around 10% and no global widespread economic downturn, then the demand for commodities will remain high. A rising USD$ might slow the rate of increase for commodity prices but probably not cause a crash in prices.

Shorter term however I expect to see the USD$ to pullback along with the US stock markets. Oil will once again have another rally when that happens.

First Resources was never really a Technical Analysis play. My considerations for buying a commodity counter was based on fundamentals of economic outlook, supply and demand. I agree with Jim Rogers.

I did however choose to buy First Resources over GoldenAgri, and Indoagri based on the chart. Also the entry price was based on what I thought might be a breakout at that time.

My exit levels will also be based on the chart. But frankly from the macroeconomics I am quite confident I will make a good profit on this stock perhaps later this month.

The 25 day moving average has been flat for a while. The support appears to be at 0.96. A break below the 25 MA would put us looking at the 0.88 support level.

RSI is still in uptrend but looks like it may break below in the coming week. Hard to say at this stage. Interestingly I wonder when is First Resources announcing their 1Q 2008 results? That may be a catalyst for a move up as well.


If we look at the SMA/EMA crossover trend change indicator there is some suggestion that the trend might be changing for First Resources since the big selldown when they had the scandal court case.

Personally I still think First Resources is trading at a discount compared to its peers in the palm oil industry due to that sell off in the scandal.

Macquarie Research had a 32 page report on First Resources released on 25 April 2008 and it looks like First Resources is still a good business overall to invest in. Below is the summary of their recommendation :

Outperform with a target price of S$1.60 We initiate coverage of First Resources (FR SP, Mkt cap: US$1bn), a pure upstream palm oil play, with an Outperform rating. Our DCF-based target price is S$1.60 (using WACC of 13.1%), representing 58% potential upside. This implies a forward FY08E PER of 16x. The shares are trading at an attractive 10x FY08E PER and 8x FY09E, with Indo plantation plays at an average 9x FY09E PER, and a huge disparity compared with the Malaysian plantation plays’ average at 15x FY09E PER.

Last done closing price = $1
Unrealised loss = -$382

2) COSCO

Long
Entry price 2.84
30 day ATR 0.24
1.5X ATR30 0.36
Cut loss stop on 1.5ATR30 2.48
Recommended cut loss 2.78
Loss on recommended cut loss -159.8411916


Target price 3.2
Profit on target price 677.1813528


Reward/risk ratio 4.236588491

Sold on 28 April 2008
Profit = $929

I sold COSCO on Monday 28 April 2008 when it hit my trailing stop of 3.34. Realized a profit of $929.

COSCO was sold off in anticipation of bad earnings for 1Q 2008. It was hard for me to understand or believe that the earnings would be poor looking at Yangzijiang's good earnings that came out on the same day.

However COSCO was indeed sold off quite severely once again because I believe shortists got into the action.

I decided to take a punt however and bought COSCO back at 3.11 on 29 April 2008, the day before the 1Q 2008 earnings were to be released.

I have posted an entry on COSCO after the results were announced. At the moment my stop for COSCO is 3.29.

From the chart

The 25 and 50 day moving averages look like they might cross soon. This would be the first crossover since the last one in Dec 2007. If so the crossover necktie might form a solid support level for the stock. I suspect it may be the 3.40 level. For this to happen we need COSCO to move up above 3.40 in the coming week and have a strong close above 3.40.

I am betting that this will happen and COSCO will move higher than that. However in line with overall markets I do see a pullback coming. And 3.40 may be a good entry point for this stock during that pullback.

There are several possible catalysts going ahead for this stock, in particular possible announcement of the 9 new vessels ordered by China COSCO Holdings Ltd (awaiting deposits) and an increase in stake in COSCO Shipyard Group Ltd from 51% currently to 80%.


Looking at the SMA/EMA trend change indicator, once again COSCO is attempting a trend change after the failed one in early April 2008. Will it be 2nd time lucky? We shall see.

Long (29 April 2008)
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

Last done closing price = $3.37
Unrealised profit = $467


Total trade summary:

Up to date realized profit/loss = $1313 + $929 = $2242

Unrealized profit/loss = $467 - $382 = $85

Review of trades in week 21-25 April 2008

1) Fibrechem

Long
Entry price 0.805
30 day ATR 0.06
1.5X ATR30 0.09
Cut loss stop on 1.5ATR30 0.715
Recommended cut loss 0.705
Loss on recommended cut loss -1053.523309


Target price 0.95
Profit on target price 1387.792446

China reduced the stamp tax duty on stock market from 0.3% to 0.1% this week. SSE rallied 9.29% on Thursday.

Fibrechem went to a high of 0.86 on Thursday. I sensed that this might be a knee jerk reaction but was not sure if it could carry on to the next day. Hence I decided to set a stop limit at breakeven level. Personally I did not expect Fibrechem to retrace that much. But it did.

Hence sold Fibrechem at 0.815.

Profit/Loss = +$30

One might say that why not take profit when it was 0.86? On hindsight we are all geniuses. I'm trying to learn to let my profits run and limit my losses. So this is still a lesson in progress.

1) First Resources

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

I said that First Resources would start to move up this week in view of the coming EGM to vote for the 10% share buy back mandate. First Resources had several big lots buy ups. But there was also selling later on.

Well 29 April 2008 is next Tuesday. So I'll just hang on. I believe this counter has very good potential.



Chart wise First Resources has been testing the downward trendline for the past 2 days but has been unable to close above it.

We'll see if the share buy back becomes the catalyst for a mean revert for this stock.

Last closing price 0.995
Paper loss = -$432

2) COSCO

Long
Entry price 2.84
30 day ATR 0.24
1.5X ATR30 0.36
Cut loss stop on 1.5ATR30 2.48
Recommended cut loss 2.78
Loss on recommended cut loss -159.8411916


Target price 3.2
Profit on target price 677.1813528


Reward/risk ratio 4.236588491

COSCO broke past my target price this week. And I let my profits run. So while letting profits run plan failed on Fibrechem, it succeeded for COSCO. My stop for COSCO on Friday was 3.34. It came close but not close enough.

China COSCO reported good earnings for FY2007 on 23 April and that gave COSCO Corp a boost here in Singapore.



COSCO had 2 bottoms around 2.80. If it closes above 3.92 it will confirm this as a double bottom. Current price of 3.40+ means we are still 20% away from confirming it. Means more upside at least till that psychological resistance.

50 day MA is not so much of a concern because it has already tested it twice.

RSI is not overbought range.

Plus COSCO has broken above the downward trendline from Nov 2007.

Fundamentals

1) CHINA COSCO did well and the shipping business is growing. JV with Indonesia on the Coal ships orders will likely go to COSCO Corp.

2) China shipping and shipyards as a whole are supported by Beijing and growing and aiming to overtake South Korea as world number one. Lots of room for expansion for COSCO.

3) COSCO forays into shipbuilding and repair represents different market share compared to Kepcorp and Sembmarine. Plus China exposure also means the demand is better.

4) COSCO Corp VP Mr Ji stated in an interview dated 27 March 2008 that they were going to make a decision soon on whether to increase their stake in the shipyard from 51% to 80%. When will this decision be made known?

So looking at it, this stock has a lot of things going for it. Plus the drop in price 2 weeks ago represents the correction has been factored in already. If not for that drop how much would COSCO be priced at today?

We will see what happens on 30 April 2008 when China COSCO and COSCO Corp both release their 1Q 2008 results. Incidentally the USA FOMC Announcement will be on the same day. 1 May 2008 is a Public Holiday in Singapore though. So markets will be closed.

Last closing price 3.47
Paper profit = $1208

Up to date realized profit/loss = $1283 +$30 = $1313

Unrealized profit/loss = $776

Review of trades in week 14-18 April 2008

1) First Resources

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

Oil has been hitting record highs. Commodity plays will be in focus over the coming weeks. I do not envision a drop in commodity prices in the near term at least until the FOMC announcement on 30 April 2008. Looking at the charts of Golden Agri, IndoAgri and Wilmar I compared them with First Resources and found that First Resources is likely to recover back to its mean price of around 1.30.

First Resources is having their AGM on 29 April 2008 and are having a resolution to have share buy back schemes during the EGM to be held also on 29 April 2008. I believe this will be the catalyst for a move up this week.



Hence decision was made to enter FR. It looked possible for a break out by TA on 17 April 2008. However it was not to be. In any case my cut loss is below the low of 0.89. TA wise it looks like First Resources will break out soon.

Entered 10 lots at 1.03
Last closing price 0.98
Paper loss = -$581

Trades from last week

1) Fibrechem

Stop loss of 0.705 was not triggered this week. Fibrechem is having their AGM on 29 April 2008. China stocks have been weak because of China's talk about cooling the economy and tackling inflation. It is a good point to note that while QDII was the talk of the town 2 weeks ago, China stocks are now avoided by and large.

Long
Entry price 0.805
30 day ATR 0.06
1.5X ATR30 0.09
Cut loss stop on 1.5ATR30 0.715
Recommended cut loss 0.705
Loss on recommended cut loss -1053.523309


Target price 0.95
Profit on target price 1387.792446


Reward/risk ratio 1.317286892

Last closing price 0.73

Paper loss = -$812

2) COSCO

COSCO recovered from it's lows early in the week to close above $3. It was close to my stop limit on Monday but it did not trigger thanks to correct use of the stop limit from last week's error on Ferrochina (lesson learnt!). Intend to hold this till the results announcement on 30 April 2008.

Long
Entry price 2.84
30 day ATR 0.24
1.5X ATR30 0.36
Cut loss stop on 1.5ATR30 2.48
Recommended cut loss 2.78
Loss on recommended cut loss -159.8411916


Target price 3.2
Profit on target price 677.1813528


Reward/risk ratio 4.236588491

Last closing price 3.02
Paper profit = $312

Up to date realized profit/loss = $1283

Unrealized profit/loss = -$1081

Review of trades this week (7-11 April 2008)

1) Ferrochina

On 7th April, bought 5 lots at 1.44 on breakout of symmetrical triangle and previous high of 1.43 on 2 April 2008.

Long
Entry price 1.44
30 day ATR 0.1
1.5X ATR30 0.15
Cut loss stop on 1.5ATR30 1.29
Recommended cut loss 1.29
Loss on recommended cut loss -798.3836535

Target price 1.66
Profit on target price 1045.058855

Reward/risk ratio 1.308968252

I started learning how to use POEMS Pro Trader this week. And successfully used it to buy Ferrochina using the Stop Limit function.

Ferrochina was sold when it hit 1.30 on 10 April 2008. I had placed the stop at 1.30 and the limit at 1.29 although the actual intended cut loss was 1.29! Learning point noted that for stop limits the appropriate way to set it would have been Stop = 1.29 Limit = 1.28 or having the stop and limits the SAME. However having them the same would mean if there was a gap my order would not go through.

Profit/Loss = -$755

Learning point : Stop should be the actual cut loss price and limit is 1 bid below it when using Stop Limit function on POEMS Pro Trader.

2) Fibrechem

On 7th April bought 10 lots of Fibrechem at 0.805. This was an aggressive buy which should not have been made on hindsight. Must learn to be more patient and disciplined in timing entries. I had missed some entries on Friday and was ruing those misses hence went in on this trade based on breakout of 3 day previous high of 0.79.

Long
Entry price	0.805
30 day ATR	0.06
1.5X ATR30	0.09
Cut loss stop on 1.5ATR30	0.715
Recommended cut loss	0.705
Loss on recommended cut loss	-1053.523309
Target price	0.95
Profit on target price	1387.792446
Reward/risk ratio	1.317286892

Last closing price 0.76

Paper loss = -$513

Learning points : MUST BE PATIENT AND TIME ENTRIES PROPERLY. Need more work on this aspect.

3) COSCO

On 10th April 2008, bought 2 lots of COSCO at 2.84. This is a punt. 2.81 was the previous 9 month low made in March. Hence a punt at 2.84. Price had dropped due to COSCO announcing that they had ONE contract cancelled. COSCO Vice President insisted that the cancellation was due to COSCO being unable to meet the clients change in requirements rather than a credit problem. However the manner in which they made the announcement as a subparagraph in their announcement of securing new contracts suggest they were trying to cover something. Further more the work was supposed to have been started in June 2007, so why wait till now to announce this change? Analysts fear that COSCO will have more cancellations and as a result Citigroup lowered COSCO's target price to 2.70.

It is yet to be known whether this would be an over reaction by sellers/shortists or whether it is indeed true that COSCO has many problems ahead.

2 factors that make me feel it is an over reaction are as follows :

1) While COSCO did announce the cancellation, they did secure new contracts

2) COSCO directors had bought the shares from the open market 2 weeks ago. And they continued to buy this week

Finally, COSCO will be having their AGM on 15th April 2008 (Tuesday) where they will announce their results. I am sure there will be clarification on this issue by then.

Long
Entry price	2.84
30 day ATR	0.24
1.5X ATR30	0.36
Cut loss stop on 1.5ATR30	2.48
Recommended cut loss	2.78
Loss on recommended cut loss	-159.8411916
Target price	3.2
Profit on target price	677.1813528
Reward/risk ratio	4.236588491

I have yet to decide if I will keep these 2 lots or cut it fast and swift. It looks like on Monday there will be a big sell down in Asia after what happened on Wall Street on Friday. However the AGM on Tuesday might clear up many things (which I am expecting it will).

Last closing price : $2.93

Paper profit = $133.


Up to date balance of realized profit/loss = $2038 - $755 = $1283

Review of trade this week (31 March - 4 April 2008)

1) COSCO sold 4 lots at 3.83 (buy 3.40)

Rationale :

"Hit" 50 day MA on first try during downtrend and likely to retrace further to fibonacci retracement levels.

Learning points : To observe because the price levels did not actually touch the 50 day MA! Nevertheless planning to buy back again at 3.40 at a later date?

Profit : $1602

2) Sembcorp sold 2 lots 4.17 (buy 4.16)

Rationale : Sembcorp's news about the water plant in China seemed to disinterest the market. Thought that might retrace after hitting the 25 day MA.

Learning points : 25 day MA not the same as 50 day MA!!! Plus forgot to note that the stock has already hit the 50 day MA once. Have added this checklist into trading system.

Loss : -$47

3) YZJ sold 5 lots 1.04 (buy 0.85)

Rationale : Already hit target price at 1.05. Looking at 50 day MA can see that it is dropping below the 2nd gap target at 1.15. Hence unlikely to get there. Decision made to take profit.

Profit : $912

4) COSCO sold 2 lots 3.74 (buy 3.4)

Rationale : Tried something new and attempted to use Elliot Wave theory to do intraday trade.

Learning points : Wave 2 can retrace all of wave 1. So instead of shorting at the start of wave 2 I should have waited for the full retracement! (COSCO opened at 3.81 that day, dropped to 3.73 then retraced back to 3.81 before finally dropping to 3.65 at end of Wave 5 impulse later in the day).

Profit : $91

Total profit/loss for this week : $2558

Total profit/loss to date = $2558 - $520 = $2038.

Review of trades this week (24-28 March 2008)

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