Local oil stocks to watch

I am particularly optimistic about the O&G sector.
On the local front, the ones to watch (Maybank) for are:

Ezion (TP:2.70): strong liftboat opportunities in Asia-Pac and Middle East

Mermaid (0.59): emerging oilfield services player

Nam Cheong (0.45): key beneficiary of recvering OSV market

Vard (1.27): improving order win momentum

Bearish going forward

My decision to short the markets back in February was way too early, as markets reversed to new highs instead. I was forced to cut my short positions, and turn long instead, incurring an overall small loss still.

Now, I am initiating new short positions, as I believe that the markets are finally primed for correction. The reasons:

•  US stocks now trading at frothy valuations (PE 18 times)
• The Fed's tapering of quantitative easing ends in October or November, and investors will begin pricing in Fed's rate hikes
• Sentiment indicators show extreme investor bullishness

In fact, Normura's Bob Janjuah has predicted that some point in the third quarter, anything up to a 10% correction would occur. A bigger correction, depending on how soon we hit 10 on the VIX, may happen four or five months after that. Historically, when the VIX hits 10, it tends to explode upwards (very bearish sign). Of course, it can stay around 10 for a very long time, meaning markets can still trend higher for now.

 

For me though, I am maintaining my shorts.

 

 

Oil stocks are strong

Even as the biotech and social media sectors are imploding, energy stocks are performing brilliantly in spite of current weaknesses.

Conoco Philips (COP) and Cenovus (CVE) are now recovering from recent lows, and are displaying trend reversal signs from down to up. Looking to buy on market dips.

Bearish on Dow, but bullish on STI

Chart-wise, I see STI breaking out to the upside from its base. For this reason, I will be cutting loss or take profit on my "short" position when the index turns down from current overbought.

The stock counters I am looking to buy include Breadtalk, Goodpack and Noble. 

I am finding lots of sell signals in US market

Despite continued analysts' recommendations on purchasing US equities, I am finding plenty sell signals in US stocks. I think insiders/ fund managers are beginning to sell out of US equities owing to rich valuations. My top 2 to short now:

Cabot Oil & Gas (COG)

Herbalife (HLF)

Death cross and bearish candlestick patterns galore. As I have said in Sun 4 Aug article last year (see my post "Are we in last stages of bull run?"), I will be preparing to short these stocks. Other candidates on my list include: Amgen (AMGN), Biogen (BIIB), Celgene (CELG), Gilead Science (GILD).

My dogged performance in 2014 and the way forward

It has been a slow and frustrating 2014....

I was short Twitter, it rose, hit my adjusted stoploss, and fell back again.... I should have been in profits...

I was short Symantec and i took profit 2 days before the price crashed 10%...

I was short Krispy Kreme and the price rose to hit my stop loss, which I forgot to raise.... I managed to put back my postion but it had gapped down.

I was short STI, it fell back slightly, and now rose back up to way above my short price and its 200-d MA (a bullish sign)... I think this one will reverse to upside soon.. I will be adding more positions on its way up and then, when it corrects (inevitably), I will get out...

Moral of story: Need to hold on to my convictions. If I think a stock is going to fall, do not adjust stop loss nor take profit too early. Always check that I have entered buy/sell prices correctly. And, always have guts to put in more positions even as stock prices going against me.
I am usually right in the stock market, just need to hold my nerves.

Royal Gold my pot of Gold?

Royal Gold made a golden cross as of Feb this year.

With the increased volatility in stock prices, gold could finally bottom. And this spells upside for gold mining stocks. I am getting in soon!