AIG

Most probably its brand is well established in this part of the world, I have many friends and friends of friends asking me for the past few months the golden question - "can buy or not?"

Let's me be honest here, technical analysis can work well with futures because we do not have to worry about magician book keepings and bankruptcies. So when I apply technical analysis on stocks, I am a bit of worried. I mean stocks like Transmile and IOI can flunk so much nasty surprises, what else can we say about those newly IPO stocks which reported beautiful sets of accounts before and during their debut and then flop within the next 2 years.

So as AIG is concerned, whatever I write here is purely from the TA readings and nothing to do with its financial background. But from I have gathered from those left handed sources, you should be careful with many of these US financial stocks because many of them still have some skeletons hidden deep inside their closet. Stocks like AIG is now riding with the DJIA in a nice bull rally, but my thinking is :- take profit whenever the signal is in (like a closing below the 30 SMA or a MACD crossdown etc) This is still a time of big crisis and not a time for buy and hold mentality.

AIG has recently strongly rebounded from 0.31+ to the current 1.60. I know there are some of those self acclaimed great "buy low sell high" artistes will say "I told you so". But I also know someone who thought 3.00+ was very low and got in and bought this stock. From the daily chart, I would touch this stock until when it broke the top Bollinger Band or the MACD crosses up above its zero signal line in mid March. If you are thinking of buying in this stock now, then the next signal would be to park your buy 2 ticks above the high hit 2 days ago.


Both its daily and weekly chart are extremely bullish with divergences as it is now recovering from an extremely oversold situation. Though I note that the weekly chart MACD is still relatively far from its zero signal line. With this, this stock may go back and test the low sides. But if it goes northward smoothly, then It should easily retest the 19.00 area. Keep 0.88 as stops. BUT remember what I said in the 2nd paragraph. Stocks are not like futures, they can go bust anytime, so keep your ears up for any bad news and react accordingly and never try to cheat yourself that that this is a solid counter!

Revisiting the crude oil

Since I last wrote on crude oil on February, the market has managed to go up a bit from mid March and then it is caught in another range. (as marked out by 2 horizontal lines) This is not unexpected as ADX continues to stay below its 20 signal line which is effectively telling us that this market is quite "dead". Other confirmations that this market is not going anywhere is while the Stochastic and the MACD are negative, the D+ is still holding above the D- which is bullish. Whenever we see the indicators failing to complement each other, then this market is NOT going anywhere .

But I remain as bullish as I last written on the crude as the bullish divergence is still intact. And now the MACD has managed to stay above its zero signal line, I would rather bet on the buy side. But of course that is not saying that I wil buy now, I would rather wait for a breakup with the ADX rising again. USD 56.00 should be a crucial level to keep an eye.


The daily subtle bullishness is well supported by its weekly chart where a bullish divergence is also found between prices' lower low and the MACD's higher troughs.Both the Stochastic and MACD have been positive and continue to rise. The only catch here is the MACD is still far from its zero signal line, so maybe we still have to be patient. The weekly ADX which is located above the D- and D+ is now falling which usually telling us that the prior bearish trend may has ended.

There is one item found in both the daily and weekly chart is the tightening Bollinger Band. Whenever this happens, it is trying to tell us BIG EXPLOSIVE moves are not too far in front. So I get increasing excited over this commodity. It is as if you are watching Ms. Lín Zhì Líng slowing pulling up her skirt in front of you. Yes sir.

HLbank

Ranhill, Scomi and Terbau

These are some of the interesting stocks I chance upon. The 2/3 short horizontal lines on the right side of the charts should be their upside targets.

愛情來了 (Love Go Go)

This 1998 Taiwan film directed and written by Chen Yu-hsun (陳玉動) was a splash at the 1998 Toronto Film Festival. Chen was directing TV sitcoms before doing this big screen item which is his 2nd. after his 1995's "Tropical Fish " . This movie is starring: Tang Na (堂娜) , Eli Shih(施易南), Chen Cheng-hsin(陳進興), Liao Hui-jen (廖慧珍), Huang Tsi-chiao(黃子佼)

Th story consists of focuses on each one of a few Taipei characters' love and heartaches : a lovelorn baker Ah Sheng (Chen Ching-shin) who is childlike, shy, a little overweight, and physically awkward. But when Li Hua (Tang Na), his childhood sweetheart, visits his bakery every day, his life takes a romantic turn. He expresses himself through food and song: he starts baking special pastries and gives them outlandish names: "I'm sorry" cakes, "Love you forever" tarts. But she fail to recognize him. Eventually, he writes her a letter (and that has to be snatched from his grip by his young foolish assistant and gave to the girl on his behalf) , spilling out his heart: she had vanished when they were graduating from primary school, but in his imaginative mind , remained with him as an "invisible friend", who served to give him courage and comfort during a lonely sad teenager years (both his parent were killed in an auto accident) . His ultimate romantic gesture is to offer to appear on a TV amateur singing competition despite hispathetic singing , belting out his fondness for her . Watch the ending scene when he finally goes on the TV and sing - it is absolutely fabulous! Li Hua's grief at being dumped by her boyfriend is interrupted by the riotous TV host's maniac laughters as she tries to continue weeping while watching Ah Sheng's televised song tribute to her.

http://www.youtube.com/watch?v=h-IyIWYAHJc

Throughout the whole film, the character of Tang Na walks with a limp which is actually the result of her auto accident in real life.

Another lovelorn typist Lily (Liao Hui-jen) who is of a bubbly and naive character. Her story starts when she finds a pager on the ground. It turns out that the owner ( Huang Tsi-chiao) who is actually a jerk but pretend dying to meet her because she talked him out of his "intended suicide" (probably because she has such a sweet voice ) . But she's rather big so when they agree to meet, she embarks on a futile crash diet/trimming program. As he is a creep, he rejects her outright when he meets her at the park. The scenes to watch out for are when she and her office friends talk about men and all those stuffs she adds on her bowl of instant noodle when she watches the TV food program.


The final story sends Ah Sung (Chen Cheng-hsin) the salesman to Li Hua's (the breath taking Tang Na!!!!! ) beauty salon, where he inadvertently intervenes to protect her from the enraged wife of her boyfriend. I am very moved by those scenes starting from the part when she weeps after an argument over the phone with her lover while she is cutting Ah Seng's hair onwards toward the very end where she went home to catch Ah Sheng's TV performance. During which she read the goodbye note left there by her lover. She just sat there and cry and cry. It would make every man in this world want to lend their shoulder/chest for her !

This film is definitely the BEST Taiwan movie I have watched over the years. It is genre-breaking style silly business with inventive touch, that finds all the sweetness inside the ridiculous characters' exteriors . But I fall in love with Tang Na the first time I saw this movie - she is soooo woman.

HSBC US

Some of my friends are thinking of buying HSBC shares. I myself still own some of their odd lots left behind from years ago. So I decide to take a look at this stock now. HSBC is listed on both UK and the US. At a glance I would rather talk about the US entity since the UK's has nothing of extreme bullishness therein.

The US HSBC has already registered a lower low and a higher MACD troughs, thus presenting a bullish divergence. Price is now closed above the top Bollinger Band with the MACD crossing above the zero signal line. The D+ has also crossed above the D- , all these are considered as bullish factor. But then since the ADX still remain flat and at a lowly 16's, I would not do anything significant as the Stochastic has already gone overbought. (if the ADX has been rising and go with a high value eg. >25, then I would watch the MACD and sideline the Stochastic). You may just want to nibble a bit here. I would do something once the Bollinger Band crosses up above the mid term moving average (red line).

HSBC is like many stocks now which are merely doing a techncial rebound from a grossly oversold zone. The weekly chart offers no evidence that it has begun a new bull cycle yet. So I would just treat this as a strong short term trade and NOT as a longer term investment vehicle. You may want to watch 38.00 and 47.00 for resistance.

Fools' gold ?

For some strange reason I notice that many financial market "experts" seem to have fallen in love with gold. As can expected from people who are in love, they tend to be blinded by their object of affection regardless how glaring their weaknesses are. During the current global financial crisis, it seems more and more of them are calling the unsuspecting investing public to share their bject of desire. Another argument given by them is that all the paper currencies are fast turning into Zimbabwe notes (latest model is 50 billions notes) and recently one of them even predicted that gold will hit 2,500. (sound familiar? remember another of them last predicted crude oil will hit 200?) And some local banks even launch their gold funds.

As a student of technical analysis on financial markets, I would go over the charts first before deciding to concur with them or not. I would first look at the weekly chart as they are the one that would tell us the "big picture". And they are telling me the following:-

1) the first thing that immediately come into my attention is a double tops chart formation as marked out by a horizontal line. A double tops formation is usually considered as an extreme bearish formation, upon confirming their breakdown, the distance going down will usually be sizable.

2) then the next item that jump in front of me is a bearish divergence found at the MACD that has formed a lower peaks while prices have form an almost equal highs. This kind of bearish divergence is usually considered as a class 2 type. A type 1 would be one with lower MACD peaks but prices doing a higher high. But nevertheless, this kind of bearish divergence is still extremely profitable if one is taking a short position.

3) the next item is prices have already closed below the 20 moving average (boxed area) .A 20 SMA is usually a reliable support or resistance line. In this case , prices remain below it constitute a bearish confirmation.

4) the Stochastic has already crossed down and go below the 80 signal line. Upon crossing down the 50 signal line would probably see more intense selling coming forth.

5) the D+ has also crossed below the D- which is giving us the first sell signal if we follow Wells Wilder's trading rule (Wilder invented this indicator) So by the coming week and if price goes below last week's low, then it would meet his extreme rule trading confirmation for a confirmed sell.

The only item that I do not like about this chart is the falling ADX which is telling me that the trend may NOT be in yet. I would like to see the ADX rise before saying that gold is heading for a major tumbling.This low weekly ADX most probably is contributing to the unconfirming daily chart as there is NO bearish divergence found. So I would expect gold to go one more trip upside, probably hitting the recent high again or even touch a new high before the next new direction is found.

So my conclusion on gold is:- unless in the near future gold can go to a new high and STAY there and beyond (thus erasing all the bearish divergences and the double tops formation), I WILL NOT buy/invest in this commodity even you point a gun at my head .

I also wish to share a kisah benar type of story with you on my mother's experience on "investing' in gold. My late mother was like many of the womenfolk of her era who deeply believe that buying gold as the ultimate investment. So during her younger days, she bought in many gold coins issued by the local banks and she also bought some gold chains, rings and other ornamental items for her 'investment'. When she passed away 2 years ago, I took out all her gold investment items and get some quotations from banks and goldsmiths trying to switch them over to other type of investment vehicles. Even without taking into consideration of inflations and opportunity cost, their quotations are near heartbreak levels. So be smart, do NOT buy physical gold unless you are thinking of becoming a boat people and you need them to buy your way to freedom .