Quick Review: DOW, AU, Korea, STI, Petron (PCOR)

DOW Jones Daily (above), S&P and Nasdaq reached April 2011 highs, and is poised to breakout anytime soon, but 3 of the major indices of U.S. in Negative Divergence. Charts are going higher and higher, but MACD and RSI is getting weaker and weaker, must be a sign that a good correction is coming to the circle area. 12300-12600. A good 3-8% correction is healthy to this market.

Quick forecast on this market : correction first, before a confirmation of breakout can happen in Q2,Q3.

AU is still in a diagonal triangle, and is gathering strength to breakout of the range. A fall below near the 4200 area is a good tradable BUY. A fall below means a revisit to 4000 or even 3800.

SG broke out 2905 diagonal triangle resistance, when U.S. correct, SG index may be back to that 2905, and serve as a good support. This index is still at 7x P/E, cheapest among the Asian countries.

Korea still is in long term uptrend, and broke out also of the 1950 diagonal triangle resistance, it is now at 20xx and a pullback to 1950 is a good support.

PCOR broke down the important 10-10.5 support, and dropped to the RED zone. Currently, based on charts, it is hard to assume where can the support be, as the gap from 7.5-9.8 is huge, and hard to assume from that 20% range the support can be. If it dropped to 7.5 level, surely, I am the one who will accumulate this stock. At 9.5x P/E, I am tempted to accumulate this stock rather than SMC. Just take note the 11 price ceiling, where PCOR still needs to sell around 800M shares to fund retirees.

Germany, U.K., FLI, and PSE 2-22-2012

U.S. may be back to the bulls, but the major indices in Europe is still facing Medium Term and Long Term Resistances. And at this point in time, and as early as Feb-Mar timeframe, we expect major decisions to where European Market will lead us. Either it broke out of this major medium term or Long term Resistances, or Greece/European fears will be back making this resistance as a failed attempt.

DAX contracted 0.2% last Q4 2011. A bad start for the year, but still, this index continues to rally , 40% from its Q3 2011 lows. DAX long term resistance is at 7300. But in Medium Term, a possible resistance at 7000 is in place, European Indeces are still biased to Medium term downtrend, and cannot still be tagged under bullish scenario, as all index have not made a higher high, or even touched their 2011 highs, and a contracting GDP Country is never tagged as Bullish one.

Long Term: Multi-year downtrend channel still intact. Sideways

Medium Term: Possible resistance is still around

Short Term: 40% Rally from the Q3 2011 lows is weakening, might find a short term peak near 7000.

FTSE also contracted 0.2% last Q4 2011. Same bad start as Germany. The Charts of FTSE is more of a do or die one, as the current level is already its Long term resistance at 6000. (Long term resistance starts from 2007 high down to 2011 high), so a breakout on this level could eaither mean the Country is doing better, or in short out of downtrend bias.

Aside from that, I am seeing a possible Inverter head and shoulder forming, and is currently at the final stages of the Right Shoulder, hopefully this is not a case, as the result of this is Double Dip. I will put 25% chance of this to happen.

Long Term: Multi-year downtrend channel still intact. Sideways

Medium Term: Possible resistance is still around

Short Term: 40% Rally from the Q3 2011 lows is weakening, might find a short term peak near 6000.

FLI alternate count, last week we posted a possible breakout with the 1.21/1.22 support, upon playing with the charts, It seems that this alternate downtrend triangle is the resistance, which pegs around 1.25/1.26, should this confirm a breakout with Volume and buyers on that level, next resistance is at 1.31/1.34.

PSE attained another new All-Time-High. The rally is extreme, but a scary one, its like going to a new restaurant without any idea what to order and how good service is, I still have a HOLD rating on PSE, as we dont know how long it can withstand the new highs, I assume 5k is just around the corner, but the Daily Negative divergence post a threat for correction. Remember what happened to Oct2010 highs, which resulted to a 15% correction. At current 17.5X P/E Ratio, I tag this index as a slightly overpriced index compared to other peers in Asia.

Other Asia Indices (Bloomberg):
HK – 9x

SG – 9x

China – 13x

Australia -13-14x

Korea – 16x

India – 16.7x

Malaysia – 17x

Taiwan – 18x

Japan – 25x

Elliot Wave Analysis of S&P500, and individual review of FLI, MEG, VLL, FGEN, PCOR

S&P Daily Charts seems to be overheating and may take a break very soon, and this tentative Elliot Wave count in S&P suggests that Intermediate Wave III of Primary Wave III may have ended, and is poised to a 1-2month correction, Intermediate Wave II correction lasted 1 month with 11% correction, if that happens to S&P, an estimate alsoof 1170-1178 correction target, which usually find support at Intermediate Wave I peak or Minute i peak of Intermediate Wave III.

Long Term: Neutral to Uptrend
Medium Term: Uptrend but overheating, a good 3-10% correction is a BUY

FLI seems to broke out of its 15-month downtrend channel. Currently it is trading at 10x 2011F and relatively not that expensive. If it indeed broke out of the channel, we expect this stock to revisit 1.31-1.34 heavy resistance, and eventually may revisit it’s 52-week high at 1.50.

Long Term: Sideways

Medium Term: Uptrend to 1.34 then 1.50 if it indeed broke out of the diagonal triangle.

MEG went down to near its 52-week low, hitting 1.58 with the recent sell-offs. It was said on the news that the S.C. news made this stock vulnerable to hidden transcations, and unaffected by the possible breakout of FLI. Another reason why this stock is not flying high near the 15-month downtrend channel resistance, is the MEG Warrant due on 2014, which warrant holders can convert their MEG-Warrant to MEG at 1.0.

This company is high likely to follow ALI and RLC’s footstep in terms of quality project and earnings. Long term uptrend looks so good and we are near its Long term support at 1.40. at current 6.0X 2011F (Bloomberg), its the cheapest Property stock out there in terms of earnings. Accumulate and BUY at 1.60 or below. And lighten around Q4 2013.

Long Term: Uptrend

Medium Term: 15-month downtrend still intact, a breakout above 1.80 will make this revisit 2.20 then 2.40 or even probably 2.70 (52weekhigh)

VLL is another property stock to look into when FLI and MEG breaks out of the range. VLL’s major downtrend resistance is at 3.20s and will follow FLI and Meg’s footstep. At 10X P/E, the company’s earnings is not that expensive, compared to ALI’s 18x 2011F. Short Term UPTREND support at 2.80, accumulate when it dips on this level.

Long Term: Sideways

Medium Term: 15-month downtrend channel still intact.

FGEN is trading near 52-week lows. I accumulated this when it hit below 13.00, EDC’s delay of Geothermal plant Operation sent EDC and FGEN down to their lows, and at 13.00, FGEN is trading at 15x 2011F. Even though AP looks cheaper at 10X 2011F, FGEN 2013 and 2014 Operation and Forecasted earnings are still promising. The Long Term Uptrend channel since the 50% Stock Dividend last 2008 is still intact, and on a 4yr Uptrend Channel. Ideally, the longer the channel, the stronger they are. 12.80s is the 4yr Uptrend Support thus I accumulated a lot, and is planning to get more when it reaches below 13.2

Long Term: Uptrend

Medium Term: Although earnings may dissapoint, this may be an AP like Energy company that doubles in 5 years.

PCOR did a hyperbolic rally from 7 to 19 last 2010-end that made this an expensive company. The hype didnt last long, as 23X P/E 2011F was so expensive, even it did a good 100% increase in QoQ earnings, at current price of 11.20, its still at 18X 2011F.

The huge 8-month downtrend channel is still intact and may take more months of selloffs and calmness before this can move. The important 11.20 support serves as an important pivot level, when it drops below 11.20, we can see 10-10.5 levels. PCOR the company still plans to sell 80-90M remaining shares to fund retirees, so far, i havent seen all the sellings yet, so anytime, they can make this stock lower.

Long Term: Sideways

Medium Term: 8-month Downtrend channel and may take more beatings. Wait for months time or buy on breakout of the Dowtrend channel.

PSE. MACD and RSI Might be an early warning

Uncertainty of Markets : Global market review (DOW,S&p, NASDAQ, HK Market and DAX ) 2-2-2012

Global markets had an enormous rally for Jan2012, beating all other years on the past Decade. They say that if Jan closed on the positive side, 80% of the time, Dec year-end will be higher compared to 1st trading day of January. Let us review on the current status of our Global Markets.




Let us start with U.S., DOW, S&P and NASDAQ don't have common thing in terms of Bullishness - Bearishness. DOW Jones was the only one who was able to revisit the April2011 high. And Dow Jones was the only one to breakout of the possible Bearish Downtrend lines. With this, I mark DOW below as the Bullish Scenario, where once it breaks out of 118xx (the April2011 and Jan2012 highs). We can assume that 13,000 and 13,500 will be the next resistances.

Long Term: Uptrend with Major Support at 11,600
Medium Term/Short Term: Pull back very likely to happen





S&P and NASDAQ Above shows that the POSSIBLE medium term downtrend lines are still intact, and they have not reached their April 2011 highs yet. Showing signs that it is a mixed deciding factor of investors who to follow on the real U.S. trend and what Sectors are Bullish or Bearish.

Overall, I can safely say, all 3 major index are now near its Major Resistance Levels, and can safely put out a recommendation to wait for further correction before trading in. (a good 3-8% correction is healthy for this market)

S&P and NASDAQ:
Long Term - Uptrend
Short Term - Pullback is likely to happen



My Favorite Asia Index. Hong Kong. Is now trading at 9.0 X P/E 2011F, still below the 12x Average in Asia. Still seems to be cheap and a very tradable market.

The huge rally from 18.5k was spectacular, hitting 20.5k instantly for an 11% profit. I got out of this market too early @ 20k, and planning to get in once it corrects to the RED Circle area, around 19.5k - 20k correction is an opportunity to BUY. Long Term Trend is Neutral, Medium Term important trend is DOWN with Major Resistance at 22.50k, still a 19.5k entry point and 22.50k selling point is a huge 15% tradable range.

Long Term: Neutral
Medium Term: Downtrend
Short Term: Rally is good, and a correction around 19.5k-20k is a good re-entry point.



Germany leads the European debt with its strong Economy, Even though London contracted last Q4. I really think Germany and other huge Indeces are still not Long Term uptrend unlike the United States. I can safely bet that U.S. is the powerhouse, and European Debt is just a piece of problem U.S. is encountering before it fully recovers from the 2009 Recession.

Medium Term, I really think that the 6800 Major Resistance is a possible hindrance to Germany's enormous rally this Jan2012. I forecast Germany to hit near 6800 area before Greece Problems in March2012 can make his Index lower, or at worst, resume its Medium Term Downtrend lines.

Rally was too good to be true, still a European Default and domino effect can erase all our Nov-Jan2012 gains, and can revisit the Oct2011 lows.

Time will tell if what will happen.

Long Term: Neutral to Sideways
Medium Term: Downtrend
Short Term:Uptrend and Overbought