SINGAPORE STOCK MARKET NEWS
China stocks mostly in correction mode

28Aug06
Many readers asked what happen to me la past 2 weeks.
Sorry, have been busy at work recently and have not provided market update for sometime. But I don’t think I have missed much since my last update on 3aug. I mentioned that I expected market to see some correction after rallying for 2 to 3 weeks from mid-July, where the rally was supposed to end in the first week of Aug06.

If we look back, although the STI index recently peaked on 18aug, many hot china stocks have actually peaked much earlier as I expected.

To name just a few, for example,
Celestial recent peaked 3aug 1.65
ChinaSun peaked 3aug 0.89
ChinaSky peaked 2aug 1.10

Of course some stocks continued to reach new highs after first week of aug but these are selective stocks with company specific newsflow or events (eg. results or conferences). On the broad market sense, I hope I have provided some useful insights (and also warning) to my readers for this on-going correction, especially for broad china stocks.

If we look at the STI, despite hitting recent higher high on 18 aug, STI actually showed slight negative divergence because STI hit higher high BUT the stochastics showed lower high. This MAY BE a sign of peaking and possible correction soon.

And if we look at most second liners and china stocks, many of their volume is now only a fraction of what they were few weeks ago. And many of them HAVE NOT reached oversold levels yet.

So I decided to be patient and wait lor ! Wait until we see MANY hitting oversold levels then I will feel more confident of re-building positions.

By the way, I have added one new feature (shout box) in the blog. Feel free to ask questions or post comments directly inside the box. So that readers can interact with each other.

Happy Trading.