Following the lead of Shanghai, I think Hang Seng and our local STI should be reversing soon. Note the sudden reversal(bullish hammer)of 300 points on Hang Seng last Friday (11/2)? I think that could turn out to be a key reversal day, even as many still believe markets to fall further. To date, Hang Seng has corrected 8%, and STI 7%. I expect more, but it rarely performs to my expectations.
But the prospect of a US correction is disturbing to me. Therefore, I would have to play this "impending rally" differently from the rest. I would have to go for the strongest blue chips, with expectations of good results. Even then, I may not be assured of success. I am more nervous about this reversal than the rest. Therefore, if I have to play this rally, it will either have to be on an extremely short term basis (before US corrects), or on a much longer term than usual basis(to wait for market to be comfortable with inflation risks again). But, the good thing is I have an array of blue chips to choose from. My first tier candidates are: Genting, Noble, SembCorp and SembMar. I am also incresingly attracted to SGX. Huge merger potential with ASX plus huge potential price upside.
When to buy:
Ideally, if STI could correct to 2980. And I will time my purchases on expectation that it will happen(falling weekly chart).
Ripe for picking: Genting, SGX
Need to wait: SembCorp, SembMar, Noble
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