Technical Analysis of CapitaLand

January 5, 2013 in CapitaLand, Singapore

Technical Analysis of CapitaLand

CapitaLand is in the business of real estate and is listed on the Singapore Stock Exchange. In this article, we present our technical analysis of CapitaLand using Elliott Wave Analysis. The below chart is the Long Term Bearish Chart of CapitaLand dating back to 2000. CapitaLand embarked on a five wave impulsive fashion from the bottom in 2003 at around 1.00 and topped in 2007 at 8.70. Thereafter, the share price slid rapidly to a low of 1.7 in March 2009. This slide was a strong move as confirmed by volume as well as MACD. As can be seen, the volume was increasing with the sell down. This is a typical impulsive Elliot Wave. This is labelled as Primary wave [A].

CapitaLand Long Term Bearish Chart - 05 Jan 2013

The recovery that followed this heavy selling was quite impressive as it looked like an impulsive wave as well. This prompted some people to call this as a new bull. The volume was strong initially but it tapered off. The MACD was also weakening which meant that the momentum was not catching up. This I have labelled as Inter wave A. The Inter A was then followed by continued selling with some decent volume compared to Primary wave [A]. This move is labelled as Inter B. Finally, CapitaLand recovered again in Inter wave C.

I’m of the opinion that Inter wave C and with that, Primary wave [B], is near completion. Comparing Inter wave A and Inter wave C, one can identify that the C wave is much weaker than wave A. The volume as well as the MACD is lower on C compared to A. This is clearly pointing to a weak recovery. Further downside is highly likely in the form of Primary wave [C]. Primary wave [C] is the continuation of the earlier downtrend and the projected target for this wave would be below Primary wave [A].

The below chart is the daily bearish chart for CapitaLand. Once again, we turn to the volume and MACD for clues on the strength of the move.

CapitaLand Bearish Chart 05 Jan 2013

The volume on the first part of the rise (A in amber) was quite decent and it was a quick rise. The MACD was also strong. When we compare that with the second upwards wave C (in amber), we can see that the volume is still quite decent but there are equally selling volume. This made the move into a choppy move which is reflected in a weaker MACD. This is a good indication that the recent ‘bullish’ move on CapitaLand is a bear market rally rather than a new bull. This points to further downside once wave C is complete. I’m of the opinion that there is no upside for CapitaLand from here.

No analysis is complete without the alternate view. In this section, we look at possible bullish moves for CapitaLand. Looking at the same Long Term Chart for CapitaLand, it is possible that the share price bottomed in Mar 2009 at 1.7 and the move up is wave 1 of a new bull. As I have mentioned earlier the volume was decent for this move up. Then the corrective wave 2 came into effect and what we are seeing now is a 1-2-i-ii setup which is a very bullish setup according to Elliott Waves. For this count to take place, the share price of CapitaLand should not fall below wave 2 which is 2.20.

CapitaLand Long Term Bullish Chart - 05 Jan 2013

CapitaLand Bullish Chart 05 Jan 2013

In summary, the opinion is that CapitaLand is toppish and further downside is very likely. This is expected to take place over a time frame of a few years. The key level to watch is the 3.00 and followed by 2.20 level.

Tags: Elliott Wave Analysis, Elliott Wave Theory, MACD, Singapore Exchange, Singapore Stock Exchange, Singapore Stock Market, Stock Market Charts, Stock Volume, Technical Analysis
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Elliott Wave Update for Sakari Resources Limited (AJ1) – 05 June 2012

June 5, 2012 in Sakari Resources

Elliott Wave Update for Sakari Resources Limited (AJ1) – 05 June 2012

The last article on Sakari Resources was on 13 May 2012 when Sakari was at 1.75. In that article, the forecast was for a further drop in the price of Sakari over the longer term. It has now fallen to as low as 1.16. That is a drop of almost 34%. The question now is where is Sakari headed to next?

In this article, the recent price movement is captured and a likely Elliott Wave count is given. We start the count at week of 15 July 2011 from a high of 3.022. The price then headed south in a five wave Elliott Wave structure to complete Intermediate wave (1) at 1.743. The price then retraced Inter (1) to 2.617 to complete Inter wave (2). This was followed by Inter (3) which is still in progress. Inter (3) is now slightly longer than Inter (1) and this meets the criteria of Elliott Waves where the third wave cannot be the shortest wave. Normally, wave three is 1.6 times of wave one and based on that, the target for Inter (3) is 0.55. It is a very deep price projection and looking at the volume of selling that is coming on for Sakari these past few days, it is quite likely that 0.55 is a realistic level for Inter wave (3).

SAKARI RESOURCES Technical Analysis Chart 05 June 2012

SAKARI RESOURCES Elliott Wave Chart 05 June 2012

I have been asked time and again how does Elliott Wave Principle helps me in my trades. Well there is a good example here. As you can see, the volume for the past few days has been very strong and the price is crashing down hard with each trading day. According to Elliott Waves, wave threes are supposed to be the strongest and most vigorous. Based on the volume information, I am of the view that Sakari is at sub wave three of Inter wave (3). It is hard to count the waves for Inter (3) as it is quite a steep move without much retracement. But, based on the volume information, it is possible to understand the character of the move and thus predict exactly at which wave the stock is right now.

If this is wave three of Inter wave (3), then the next likely move would be Minor wave 4. I am expecting a shallow or horizontal move for Minor wave 4 before further price slide takes place to complete Inter wave (3) at 0.55.

The alternate view is that this correction is over in a zig-zag formation and a bullish upside move can be expected next. This bullish count is supported by the fact that the upwards move since 2009 was with much higher volume than the selling volume that we are seeing now. Also, this heavy selling can be interpreted as selling climax and as we know, the price recovers after such an event.

We need to watch the price movement on Sakari for any signs of a strong recovery from current levels. If the anticipated recovery is strong and with volume confirmation, then this alternate count will gain traction. Until then, the primary count is still bearish and further price slide is expected in the coming weeks with occasional relief rallies.

Tags: Commodities, Commodity, CRB, Elliott Wave Analysis, Elliott Wave Update, Fibonacci Retracement, Singapore Exchange, Singapore Stock Market, Stock Market Charts, Technical Analysis
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Elliott Wave Analysis of Amtek Engineering (M1P) – 5 June 2012

June 5, 2012 in AMTEK Engineering

Elliott Wave Analysis of Amtek Engineering (M1P) – 5 June 2012

Amtek Engineering is listed on the Singapore Stock Exchange. It is a well established company providing end-to-end design and manufacturing solutions in the area of precision components and casings.

In this Elliott Wave analysis, we start at the peak of 1.40 hit on 14 Jan 2011. Thereafter, the stock went down hill in what looks like a typical five wave structure which is confirmed by the MACD. The low of 0.485 was hit in end Nov 2011. Following this, a recovery took place and it appears that it is in the middle of the recovery phase. I believe that the recovery is in a zig-zag and thus far, the wave a and b of the zig-zag appears to be completed. The next likely move is the wave c with a target of the 0.9.

AMTEK Elliott Wave Analysis 5 June 2012

The below chart is the detailed chart of the recovery phase. I have labelled the recovery as a zig-zag with Minute waves [a] and [b] completed and Minute [c] about to start. One of the reasons for the confidence in this count is that the Minute [b] ended in an ending diagonal (triangle) pattern. This pattern indicates an exhaustion and a likely move in the opposite direction. The trading plan for this stock is to go long with a successful break out of the ending diagonal to the top side. Based on this chart, this would mean that a close above 0.635. The target of 0.9 was is where wave [c] = [a]. There are also a few resistance at this level and this can be seen the longer term chart above. There is a divergence on the daily MACD compared to the price which is another indication of a likely bullish move. The stop loss can be set at 0.615 which is the recent low.

The alternate bearish view will be triggered if the support line is broken to the bottom side. Also note that although the arrow is drawn as a straight line, the actual move would likely take place in a higher high, higher low formation.

AMTEK Elliott Wave Analysis 05 June 2012

Tags: Amtek Engineering, Elliott Wave Analysis, Elliott Wave Update, Fibonacci Extension, Singapore Exchange, Singapore Stock Market, STI, Stock Market Charts, Technical Analysis
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