Singapore Banks (DBS, OCBC, UOB) Getting Bullish!

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Singapore Banks stock rally after a commitment by European banks and other private bondholders to accept a voluntary 50% writedown on Greek government debt, a boost in the lending power of the euro-zone bailout fund and a 106 billion euro ($148 billion) recapitalization of European banks. All 3 Singapore Banks (DBS, OCBC, UOB) have broken out from the down trend channel and also showing a potential “Higher High, Higher Low” uptrend chart pattern. This represents a good opportunity to long the stock till the 200D MA resistance. However, the current rally is not a good entry time for the value investing base on current valuation base on Price to Book (P/B), PE comparison and PEG ratio.

 

 

Continue ReadingSingapore Banks (DBS, OCBC, UOB) Getting Bullish!

It is time to Short Financial ETF and Singapore Bank Stocks!

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Financial Sector is the WORST Performing Sector Year To Date. This is not really a surprise to me as the Debt crisis in Europe and US are at the edge of getting out of control.  You can check out the relative Sector Performance HERE (Finviz.com) . (I simply LOVE this site!) The recent news of lawsuit by the Federal Housing Finance Agency over the US banks make the situation worst. Read the news here. All these bad news will affect Singapore Financial Sector like UOB Bank, OCBC Bank, DBS Bank, SGX, etc although they are fundamentally strong. I expect more downsides for these 4 stocks although they are holding pretty well and not as bad as the US banks so far. This phenomenom is called Movement in Sympathy in stock market.

So, is this bad news or good news? For those who are still holding bank stocks and still “hope” the banks stock price will recover to make profit or breakeven, you probably need to do more exercise to get a stronger heart to ride through this volatile period. To me, I see many good trading opportunities in the Financial sector. 

Below is my trading plan:

  1. Look for opportunities to short UOB, DBS, OCBC and SGX using CFD. – Use Technical Analysis.
  2. Buy US Short Financial ETF. – Use Technical Analysis.
  3. Bottom fishing Singapore Banks when they are super under value. – Use Fundamental Analysis and Stock Valuation (PE Ratio, Price to Book Ratio, Discounted Cash Flow Model, Discounted Dividend Model, Discounted EPS Model)

The reason I don’t plan to buy any US bank stocks when they are under value because fundamentally the US banks are still very fragile and the debt crisis in US cannot be fixed overnight especially when the Republican and Democrat cannot work together to solve the economy problem.

I listed some relevant Financial ETF and Singapore Bank Stocks here for reference.

XLF (Financial Select Sector SPDR ETF)

 A wide array of diversified financial service firms are featured in this sector with business lines ranging from investment management to commercial and investment banking. Among the companies included in the Index are JPMorgan Chase, Wells Fargo, and BankAmerica Corp. 

http://finviz.com/chart.ashx?t=XLF&ty=c&ta=0&p=d&s=l

 

SKF (ProShares Ultrashort Financials ETF)

ProShares UltraShort Financials seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Financials IndexSM. This ETF seeks a return of -200% of the return of an index (target) for a single day.

http://finviz.com/chart.ashx?t=SKF&ty=c&ta=0&p=d&s=l

 

SEF (ProShares Short Financials ETF)

 ProShares Short Financials seeks daily investment results, before fees and expenses, that correspond to the inverse (opposite) of the daily performance of the Dow Jones U.S. Financials IndexSM.  This ETF seeks a return of -100% of the return of an index (target) for a single day.

http://finviz.com/chart.ashx?t=SEF&ty=c&ta=1&p=d&s=l

 

UOB Bank

 

OCBC Bank

 

DBS Bank

 

Singapore Exchange (SGX)

 

 

Feel free to re-forward or share with your friends, relatives and family if you find my analysis is useful. No copyright.

Disclaimer: All the information above are for my own analysis. I am not a Certified Financial Analyst and not from any brokers, banks or any related financial institution. It is not my recommendation to buy or sell any stocks. The trading strategy listed above is not suitable to everyone due to individual risk profile, different degree of knowledge of Macro-economy, Fundamental Analysis and Technical Analysis.

Continue ReadingIt is time to Short Financial ETF and Singapore Bank Stocks!

Good Lesson Learnt on My CFD Trading (Shorting)

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Disclaimer: The information shared below is not a recommendation to buy or sell. Readers should not copy any strategy here because everyone has different trading psychology, greed and fear threshold, holding time frame, risk tolerance and perception of the market direction.  The information shared below is not a show off and BS that I am a guru. I am just a ordinary retail investor or trader who just started using CFD to short the stock market recently. My portfolio is a snapshot when the profit is the maximum. I have closed some of the positions when I write this post. I have shared what I have done wrong of my past trading and this post is to share what I have done right. I am using this opportunity to document my trading strategy so that I can continuously improve my win rate and consistency.

First time to see my portfolio all green when the stock market is red…. i.e. I am shorting the stocks. (Sell High First, Buy back at low later). What I have done right:

  • Study the stock chart and candlestick everyday after market close. Note: I am not using MACD, RSI, etc technical indicators to time my entry. These Technical indicators are lagging indicator.
  • I pay close attention when the stock price trades close to the resistance level and starts to turn down. I also look at any “gap down” oppportunity to short the stock.
  • Only enter a trade where there is a clear chart pattern or candlestick pattern.
  • Always calculate the profit potential vs loses risk before entering a trade. Profit Potential must be bigger than Losses Risk.
  • I set stop loss for EVERY trade. I get burnt many times when I did not set stop loss in my past trades. Setting stop loss will let the machine takes over my emotion when the stock price does not go towards the direction I am hoping for. I am very disciplined this time to let the machine to “auto-close” my trades.
  • I analyse the chart every day and review my stop loss. I move my stop loss to protect my profit and make sure I don’t lose money as first priority. It is OK not to make money in a trade but never lose money. Always remember Warren Buffet’s Rule #1: Never Lose Money, Rule #2: Don’t forget Rule #1.
  • I set my profit target in every trade but monitor closely everyday if there is trend reversal candlestick. I will close my position immediately if there is a reversal pattern.
  • Be VERY Discipline and follow through trading plan as much as possible.
  • Let trading plan to take over my emotion.
  • It is not possible to 100% get all the trades right. I have learned how to lose small money consistently for wrong trade and make more than 50% profit for right trade.

Welcome for any additional comments to help me to improve my CFD Trading.

Continue ReadingGood Lesson Learnt on My CFD Trading (Shorting)