A titanic....

An interesting counter appears in my search for weak counters trading on the Singapore Exchange. It is none other than the big ship which makes up the component stocks of STI Index: NOL. While several research houses have placed target of ~2.60 for this counter amid better economic conditions, the price keeps slipping lower for no apparent reasons. One thing about research houses targeted price is they are based on fundamental valuation (i.e. P/E, sum of part, future value etc) which seems logical, but seldom will they tell you about their Time Frame. This is the most important piece of information for all investors! I believe a mismatch in investment time frame/horizon is the key reason why investor reading research reports lose their hard earned money to market predators!!!

On a macro level, STI close above 3050 today, which means STI is gaining some strength. However, it is not known if the sharp rally last week is due to short covering as a result of Japan crisis panic selling the week earlier. Do note last week rally is done with a relative smaller volume and is still below 50MA. Intermediate bias is still bearish though that can change with more information coming in the next few days. In other words, let Mr. Market show its trump card to you rather than you trying to guess or outwit him :)

Let's take a look at Titanic NOL. Strong selling volume with strong bearish candle that close right at the critical support level 1.93. Note support level are zone, not exact level. If price pierce through the closest low 1.90 make on 17th Mar, it may suggests selling to the next support level 1.75-1.78. Other supporting evidences pointing to further price decline include the downwards sloping 20MA, the weakening momentum, and rising oil prices due to Middle East situation. An possible catalyst to push price down to 1.78 level could be the ex-dividend date on 15th April. It is commonly known that price will gap down by the dividend amount (i.e. 0.04 in NOL case) the next trading day after ex-D.

Happy profit!!!