Sell in May and go away??

Sell in May and you will regret??

Stay in May to enjoy the play??

Many participants are puzzled at this unusual times, on one hand the real economy is still struggling but on the other hand the stock market looks like it is staging a strong come back. Could it be the beginning of the next bull run or an extended bullish bear trap?

Some investors who were stuck with stocks bought much earlier are beginning to unload when their stock prices are at their break-even levels, while others continue to chase up their favourite stocks fearing they might miss the boat if they are still at the sidelines.

Whatever it is, just be very cautious.

Taking some profits off the table is a sure right thing to do. If certain stocks do not perform as anticipated or worse they fall below one's cut loss level, liquidate them.

The market is always there, one can always come back when technicals signal so.

Since hitting more than 4-year low of 1.70 (adjusted for rights issues) on 3/3/2009, Capitaland rebounded with strength until it almost doubled its value to 3.13 on 16/4/2009, a spectacular performance of 84% return in 1.5 months!

However, it advanced as fast as it plunged, with 25% of its value vanished since the recent high of 3.13! It is obvious the trading strategy of late is to enter and exit with fast and furious actions, best adopted in times when the underlying economy still looks very fragile.

It appears that Capitaland might hover around the 50% Fibonacci retracement of 2.40, a level once broken down with volume will mean further downside towards 2.25.

On the flip side, there is a high chance Capitaland will experience a technical rebound as it is basically oversold with short term resistance capped at 2.58.

Results due from Goldman, J.P. Morgan Chase and Citigroup...

It's gut-check time for investors next week as earnings from three of the nation's largest banks may help determine whether the recent financial-led stock-market rally is a legitimate bull run or a bear trap.

When the first quarter ended last week, it appeared to some the best of times, and to others the worst. Financial-sector bulls during the quarter profited mightily, while bears took a beating, but ever determined, continued to increase short positions betting against the tide...

Another bright day, thanks to the good shows performed by Dow Jones last night. Many traders are getting anxious now, kept wondering whether it would be too late to buy later, if they don't buy now.

Well, if the trend turns up, for sure there will still be plenty of time to go long. One has to be certain the uptrend is clear, that means to let the market charts its own course with more bullish confirmation.

Should one wish to be early birds, make sure to stop loss if the uptrend turns out to be another false one, as evidenced by previous failed attempts (twice) by STI to reverse from bottom.

It might not be a good idea to be early. It is true that "early bird catches the worm". But it is equally true that "early worm gets caught by the bird". :)

Gold seems to be hedge funds’ best friend of late due to so much volatility in the stock markets.

Its chart has been very volatile since having climbed to record high 1014 on 17/3/2008 before it plunged to as low as 681 on 24/10/2008 with a whopping 300 points difference. Gold nearly breached its record high on 20/2/2009 before it retraced to the current level.

The trend line AB signals that Gold is still in the uptrend in the short term with support at 900. There is a likelihood Gold might breach the recent high of 1005 and test the major resistance at 1014 in the near term, especially so if the stock market continues to be bearish.

US: S&P hits 12-yr low as US stake in Citi stirs fear

* Govt stake in Citi spurs dilution worries
* Healthcare down for 2nd straight session on Obama plan
* US economy shrinks at 6.2% annual rate in 4th qtr
* Dow off 1.7%, S&P 500 off 2.4%; Nasdaq off 1%

NEW YORK - US stocks fell and the S&P 500 closed at a 12-year low on Friday, after the government said it will take a large stake in Citigroup's common shares, fanning fears it will increase its role in other major banks.

The decline closed out a grim month on Wall Street, with the Dow industrials hitting the lowest level since May 1997 as the blue-chip index fell for a sixth straight month.

Healthcare and drug companies, such as Merck & Co and Johnson & Johnson, fell for a second day on Friday on worries that US President Barack Obama's budget proposal will strangle profits as the administration tries to rein in healthcare costs.

Data showing the US economy shrank at an annual rate of 6.2 per cent last quarter also weighed on the market.

Citigroup shares tumbled 39 per cent after the government said it will convert up to US$25 billion in the bank's preferred shares to common stock in a move that could dilute existing shareholders' ownership by 74 per cent. The S&P financial index sank 8.1 per cent.

The Dow Jones industrial average dropped 119.15 points, or 1.66 per cent, to 7,062.93. The Standard & Poor's 500 Index fell 17.74 points, or 2.36 per cent, to 735.09. The Nasdaq Composite Index slipped 13.63 points, or 0.98 per cent, to 1,377.84.

US stocks have lost US$10 trillion since peaking in October 2007.

For the week, the Dow fell 4 per cent, the S&P 500 slid 4.5 per cent and the Nasdaq dropped 4.4 per cent.

For the month, the S&P fell 11 per cent and the Nasdaq shed 6.7 per cent.

Source: Singapore Business Times - 28 Feb 2009

Biosensors International Group has been slowly gaining momentum since it touched historical low at 22.5 cents last October. It has been trading upwards in the ascending channel, a sign that it might have bottomed. More volume has to be present to ascertain its bullishness though.

At the moment, the resistance is located at 39 cents with support at 31 cents.

Singapore Technology Engineering Ltd (ST Eng) has been trading within an ascending triangle formation since hitting 5-year low at 1.82 on 28 Oct 2008. The current resistance at 2.58 seems to be a tough obstacle, being tested numerous times without success, while higher lows are achieved, forming an ascending support line B which is forcing it towards the 2.58 resistance.

A breakout above the 2.58 resistance or below the support line B has to happen by early February 2009.

From the ascending triangle, it seems that the likelihood of it breaking above 2.58 resistance is high (even more so in a bullish environment).

However, one must not discount the fact in current gloomy environment, it is highly probable that ST Eng will trade below the support line B and continue its longer term downward movement.

Trade with caution.