Author: Ernest Lim's investing blog

S&P 500 jumped 4.3% last week, the best performance since Jan 2013! Is the recent sell off over? (18 Feb 18)

Last week, all three U.S. major indices (i.e. DOW, S&P500 and Nasdaq) have registered their best weekly performance in years. Is the recent sell off over? Let’s take a look. 7 observations on the market U.S 10Y bond yield is still relatively high at 2.875% (click HERE) vis-à-vis 2.418% a year ago. If it suddenly surges to around 3%, it may fuel another sell off; Inflation based on several indicators such as core CPI / core PPI released the week of 12 – 16 Feb are rising faster than forecasts. However, market shows limited reaction towards the inflation data...

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Global indices have tumbled 6% since their recent high. Will they go lower? (7 Feb 18)

Dear all, With reference to my earlier write-up citing that “Volatility in the market is among the lowest in 118 years…” (click HERE), I guess the old saying is still true. i.e. “Be careful of what one wishes for”, especially in the equity markets! Global indices have recently tumbled at least 6% since their recent high. Will markets fall further? S&P500 closed at 2,682 S&P500 has swung from an intraday high of 2,873 on 26 Jan 2018 to touch an intraday low of 2,593 on 6 Feb 2018. 20D and 50D exponential moving averages (“EMAs”) are turning downwards. Other...

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Singtel nears two-year lows, will it go lower? (2 Feb 18)

Dear all Singtel has breached below $3.50 on increased volume last Fri. This is significant as it has not closed below $3.50 since 4 Feb 2016. Volume has picked up significantly with the drop. Will Singtel go lower? Singtel’s chart analysis Singtel has breached below its trading range $3.57 – 3.65 established between 18 Dec 2017 – 30 Jan 2018 on 31 Jan 2018. Volume has accompanied the fall by surging for the past four days and the volume of shares transacted for the past three days hit a daily volume of 49 – 51m shares per day. This...

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Ernest’s market opinion – Are we heading to a blow off phase? (18 Jan 18)

Dear all Dow surged past 26,000 overnight and Hang Seng closed at a record 32,122 today. Is the BIG Bull coming?   For this write-up, I will focus on the U.S. market Based on Bloomberg, Grantham, the chief investment strategist for GMO wrote on 3 Jan 2018 that the U.S. stock market may be approaching a melt up or blow off phase. A melt up phase refers to a sharp increase in the share prices driven by sentiment or the fear of losing out. Are we in the blow off phase? To be frank, I am not sure. However,...

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GSS announces oil, price drops near pre announcement! (21 Dec 17)

GSS Energy (“GSS”) announced that it has struck oil and (surprise) gas in its first well on 13 Dec 2017. Share price jumped to an intraday high of S$0.178 on 14 Dec 2017, after the trading halt was lifted. It has since weakened to an intra-day low of S$0.156 on 21 Dec 2017 before closing at $0.161. Is the party in GSS over? Or is this just the beginning? I have managed to meet Mr Sydney Yeung, GSS’ CEO for a 1-1 chat two days ago on the company’s business and outlook.   Here are the key takeaways Q1....

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Ying Li’s chart – consolidating nicely around $0.14+, before the next up-move? (12 Dec 17)

Ying Li’s chart seems to be consolidating nicely around $0.14+. Where will it go from here?   Personal chart observation With reference to Chart 1 below, Ying Li surged to an intraday high of $0.164 on 28 Nov 2017 immediately after the divestment announcement (See elaboration and announcement link below), before profit taking set in. Since then, Ying Li seems to be consolidating around $0.14+. Since 16 May 2017, Ying Li has been setting higher lows and higher highs. All the exponential moving averages (“EMAs”) have either stopped declining, or are moving higher. Although Ying Li’s share price has...

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Ying Li’s chart – consolidating nicely around $0.14+, before the next up-move? (12 Dec 17)

Ying Li’s chart seems to be consolidating nicely around $0.14+. Where will it go from here?   Personal chart observation With reference to Chart 1 below, Ying Li surged to an intraday high of $0.164 on 28 Nov 2017 immediately after the divestment announcement (See elaboration and announcement link below), before profit taking set in. Since then, Ying Li seems to be consolidating around $0.14+. Since 16 May 2017, Ying Li has been setting higher lows and higher highs. All the exponential moving averages (“EMAs”) have either stopped declining, or are moving higher. Although Ying Li’s share price has...

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Ernest’s market opinion (10 Nov 17)

Dear all STI has closed at 3,420, in line with my view that STI’s chart continues to be bullish (refer to my technical write-up on STI HERE), despite the elevated RSI. 1. Equities – still favour over bonds over 3-5 year time frame but… Personally, notwithstanding the market rally, I believe that over the long term, equities are still likely to outperform bonds and cash. Having said that, I am not telling all my clients to plough everything into stocks NOW, given that in the near term, there may not be significant catalysts to push the market higher by...

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2 companies to watch out as markets reach new highs (3 Nov 17)

Based on yesterday’s close, Nasdaq clocked a 63rd record close for 2017 and overtook the previous 62 record closes for 1980! S&P500, Nasdaq and Dow registered their 25th record close for 2017 simultaneously, matching the record established in 1995. On our local front, STI approaches a more than two year high. 2017 has not ended yet. For those investors who have not invested much, are they too late to the party? Are there still stocks with scope for potential upside? Personally, I believe that there are two companies, namely Hatten Land (“Hatten”) and GSS Energy (“GSS”) with interesting charts...

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Ernest’s market opinion (27 Oct 17)

Dear all STI has closed at 3,386, a fresh 29-month high. Some of you who have been less than 30% invested in their portfolios and have not added more exposure in their equities portfolio last month are wondering whether you have missed out of the rally. Should you continue to chase this? Read on for more. S&P500 last closed 2,581 S&P500 is on a strong uptrend with all the exponential moving average (“EMA”) trending higher. ADX closed at 29.3, amid positively placed DIs, indicative of a trend. RSI closed at 70.7. This is not extremely overbought, relative to past...

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What’s next for Sapphire if HKICIM becomes a substantial shareholder (19 Oct 17)

Sapphire surged 11.5% this morning to touch an intraday high of $0.340 today on an announcement posted on SGX late last night. It closed +$0.01 to $0.315.   What happened yesterday? Two of Sapphire Corp’s largest shareholders, namely Best Feast Limited and Ou Rui Limited are swaping a combined 27.96% stake in the company with new shares to be issued by Hong Kong-listed Hong Kong International Construction Investment Management Group (“HKICIM”). According to an announcement by Sapphire, the above share swap represents Sapphire’s share price of approximately  S$0.51[1] per share.   Why Sapphire? I have been following up on...

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GSS Energy – Personal view from technical and fundamental aspects (6 Oct 17)

In my technical write-up on GSS Energy (“GSS”) dated 14 Sep 2017 (click HERE), I highlighted the possibility that GSS may be on the verge of forming a potential inverse head and shoulder formation. For this write-up, I have put in my personal view based on both technical and fundamental aspects. Read below for more. Technical outlook – bullish Why do I feel the chart looks positive? a) Previously, in my earlier technical write-up, I mentioned that a breach above $0.157 with volume and on a sustained basis points to an eventual measured technical target of around $0.186. GSS...

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Ernest’s compilation of stocks sorted by estimated total potential return (29 Sep 17)

Dear all S&P500 hit another record last Fri! Some private banking clients have enquired on any interesting stocks to take a closer look with a horizon of 1-3 years. Therefore, I have compiled a list of stocks based on Bloomberg’s data as of 29 Sep 2017. Table 1 shows only the top five stocks with the highest estimated total potential return. Table 1: List of top 5 stocks with the highest estimated total potential return Source: Bloomberg as of 29 Sep 2017 Noteworthy points This compilation is based on Bloomberg’s data sorted with my set of criteria namely, a)...

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Hatten Land – poised to breach above $0.210 (26 Sep 17)

Hatten Land (“Hatten”) has been trading in a tight range $0.192 – 0.210 for the past two months. Recently, there seems to be a pick up in the volume traded for the past two days. Hatten’s chart looks positive on several fronts. Chart analysis Based on Chart 1 below, odds seem high that Hatten may be poised to breach above $0.210 in the next couple of months. This is because a) The recent price increase (albeit mild price increase) is accompanied with volume. On the days which Hatten falls, it is accompanied with lower than average volume; b) A...

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GSS Energy potential inverse head and shoulder formation (13 Sep 17)

Since my write-up on GSS Energy (“GSS”) dated 18 Aug 2017 (see HERE), GSS’ share price has jumped 12% from $0.137 on 18 Aug 2017 to close at $0.152 on 13 Sep 2017. Based on my personal chart observation, it seems likely to be in the midst of forming a potential bullish inverse head and shoulder formation. Chart outlook GSS has reclaimed its 200D exponential moving averages (“EMA”) within three trading days after breaching. It has subsequently moved back to its lower trading range of around $0.152. Based on Chart 1 below, there are certain noteworthy points. a) Potential...

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