Harvesting profits

STI is stalling around the 3,000 level, and I thought this would be a good opportunity to take some profits off the table and wait for the inevitable correction to add positions back. However, it is not my policy to be too active in the markets. I am taking profits only because these stocks were either meant for trading, or I did not feel comfortable holding on to them anymore as I had bought them at the wrong price.

Trading Portfolio Gains:

Stock	Price Bought	Price Sold	Realised Gain (%)
ICBC	4.22	5.47	+29% over 3 mths
Anhui	24.80	28.00	+13% over 3 mths

Long Term Position I am disposing as I feel I bought at the wrong price:

Stock	Price Bought	Price Sold	Realised Gain (%)
Sembcorp	4.85 (too high)	5.11	+5% over 6 mths

The remaining stock in my trading portfolio, Yanzhou, I am waiting to sell over the next few days at breakeven.

For Noble and NOL (both long-term portfolio), I will be holding on.

On my watchlist:
Wilmar

The length of penny stock rally

According to this research on penny stock runs over the last 10 years, penny stock rallies last from 6 to 13 months.

Start	End	Duration (Months)
Sep 26 2001	Apr 24, 2001	7
May 1, 2003	Oct 22, 2003	6
Oct 21, 2005	Apr 21, 2006	6
Jun 14, 2006	Jul 17, 2007	13
Mar 17, 2009	Jan 15, 2010	10
May 26, 2010	Jan 19, 2011	8

(Source: The Edge, Feb 20 2012)

Since our current penny stock rally only began in earnest in Dec/ Jan, we can look at May/June as the dateline. Not too late to jump on the bandwagon. I am waiting eagerly for the correction.

Does this represent the future fate of stocks?

F&N is the first stock to rebound during the August selldown last year. Of late, it seemed to have lost its spirit, failing to successfully challenge its Oct 2010 high. I am of the opinion that the play on this counter is over. The other blue chip stocks in Singapore should encounter similar fates, approaching past highs, and then tapering off, soon.

Penny Comeback

It seems penny counters are hogging all the headlines these days... Yoma, Ipco, Unifiber...
It is popularly known that when penny stocks come into play, the end of the bull market is near. However, I am still not worried at this stage yet, because markets will have a little bit more room to run. But by 13 April Friday, I will be out of all my trading Long positions.

In fact, I am already out of ICBC (Industrial & Commercial Bank of China) @ 5.47 for a 29% gain, held for 2 months.

Should markets correct, I will continue to use the opportunity to long , but this time round, I may add some pennies.

The watchlist, as recommended by Maybank

Stock	Last Price	PER Current	PER Forward	P/BV	Yield
Ausgroup	0.405	na	na	1.0	na
Broadway	0.39	17.7	6.4	0.7	4.6
China MingZhong	1.01	4.2	3.2	1.0	0.0
Eratat	0.155	2.2	2.1	0.6	4.5
Lian Beng	0.385	3.7	3.4	1.0	4.4
Li Heng	0.166	na	na	0.4	na
Mercator	0.18	7.1	14.2	0.5	7.0
Midas	0.405	12.1	10.4	0.8	2.5
Pacific Andes	0.255	6.3	5.5	0.6	4.4
Raffles Education	0.495	21.5	29.1	0.8	2.8

I will also be looking at Genting, since it has not really moved much during the Jan run-up.

The Edge's Top 10 picks

The Edge has published its Top 10 picks for 2012. Although not always accurate, they are widely
followed in the local investing community.

Company	PER	Div. Yield(%)	NAV ($)
Bt Sembawang	4.8	1	3.98
CMA	13	1.2	1.52
FJ Benjamin	12.6	6.7	0.23
Genting HK	22.4	0	US0.27
Noble	12.9	2.3	0.88
OKP	7.2	1.8	0.24
Pan United	8.4	6.5	0.52
Semb Marine	13.4	2.2	1.05
ST Engineering	16.7	2.5	0.5
UOB	11.2	3.5	12.89

If stock markets continue its move upwards, I will forget about this list. But if stock markets
correct, I may pick some counters from this list to add to my existing portfolio. Noble and SembCorp Ind (parent of SembMar) are already in my portfolio.

STI has broken out... more upside ahead

As expected, STI has broken out to the upside...

This should at least lead to a mini bull market... before another financial calamity grips the market.

What a way to usher in the YEAR OF THE DRAGON!

Will STI turn bull? I'm betting it would...

What a fantastic performance by the STI in the weeks leading to the Lunar New Year. Look at the chart below:

The STI is challenging its 200-EMA. If it successfully crosses, it will be very bullish for Singapore stocks in the days and weeks ahead. What about other indices? As has been mentioned in my 9 Jan post, the Dow, DAX and FTSE have already broken on the upside of the 200-EMA. Hang Seng is similar to STI, just about attempting to break past. The Shanghai Index, meanwhile, is the laggard, but I do expect better performances from it in the weeks ahead.

What does this imply? From a trader's point of view, definitely to be a buyer. Even if we are no longer buying, then at least do not sell shares yet, because better days are just right ahead.

So, from the technicals, things are improving . What about the fundamental perspective? Jonathan Wilmot, chief global strategist at Credit Suisse provides these reasons:

1. Global industrial production is now significantly lower than global demand. In 2009, production surged shortly after economic growth rebounded.
2. There is a significant divergence between the level of US corporate profits and trend real equity returns.
3. Equities are cheap.

Hence, knowing that the bull is coming, I will be setting my selling price targets. In the meantime, be patient and just wait.