Sept 26, TA for STI

Prior to the Global Sell-off on Wednesday, the STI is in narrow band with Descending Triangle Formation. In my LIVE chat, I constantly remind viewer the 2700 line, is that Market cannot afford to break it, as it aligned with a fibonacci support level of 61,8% (2589) and Classical Support of 2680.

Will the market gains momentum and swing up? From the technical chart, there is a strong downward channel trendline. It is aligned with the 20D MA resistance. Since then start of the fall, STI index is not quite successfully trend above the 20D MA. The downward channel will still persist for a period of time.  The little "white hammer" might signal a slight rebound. I would not advice you to catch the technical rebound as the higher HIGH is limited and restricted by MA. There will be more potential downside, as Market is deliberately wanted to test the support.

Another view of the STI in weekly chart, the ancient art of Fibonacci Retracement. You can see how market consciously/subconsciously meeting and settle down on those imaginary line. Thereby, it is important to watch those line when you trade. As it down more, there will be more value investing stocks for us to park your money there. There will be a limit those good value stock price will go further down.

Sept 20, TA/FA for Ausgroup

TA for Ausgroup,

• Trend - Side,
• Momentum - Moderate
• Support - 0.31,0.26
• Resistance - 0.37
• Volume - Surge in volume
• Candlestick - Engulfing

From the daily TA chart, Ausgroup is now near resistance. It is still trending at SIDE. Will it be able to reach a new high? The high volume is quite an interesting signal for us to look at it closely. But is it also important to track back the past TA for more information. 

From the Weekly TA chart, something important for us to take note is that very time, when there was a surge of high volume. Definitely, it will attract traders and subsequently, it goes down. it's quite an abnormal behaviour. So the history is now repeating itself? Will you trade for this stock? Or do you believe this company has a strong fundamental? Maybe, we should look at the Annual Report for FY 2011. How they make money?  

Looking at the simple FA,

• NAV - 0.39 ( slight discounted NAV)
• Yield - 1.73% (below inflation rate)
• PE - 10.6x (need to calculate EV/EBITDA for Fair PE estimation)

Personally, from the Finance highlight, this type of industry is high revenue but low margin business. It has poor cash flow generated from Operating Activities (-116%). The financial health of the company is not that fantastic.

My advice is to stay away from such stock, as it might be a trap for retail investors and the financial health of business nature is not that attractive.