Sunday, November 16, 2014

Something Smells Fishy... Bad Breadth?

Something feels kind of funny to me regarding the STI. The index itself has been playing rather nicely, grinding upwards in general, but my portfolio and many of the stocks on my watchlist are not seeing this strength. It feels like there is a disconnect between the top index constituents and the rest of the market.

Of the 100 issues that I monitor, most of them have peaked out in late May or in July and many are far away from their previous highs. They all look like they need at least a 10% pop to get near their own highs.

In fact, I see many stocks slipping and losing previously thought strong supports. A whole bunch of stocks look attractive to me now, but I am sure that once the STI halts its ascent and starts heading lower instead, a wave of negative sentiment will push some tickers to extremely attractive points.

Examples of tasty looking treats to me are: Keppel, OUE, Sembcorp, Sembcorp Marine, SIA Engineering, Singapore Finance, Super Group. Who's to say their downside is over? I am not buying them yet, but these are just some tickers which have really ugly charts recently. With issues like this pushing lower, the STI grinding upwards doesn't seem very healthy to me, but that's just my feel of it.

Reading this post by Divergence Trader and studying his unique CADI indicator overlay seems to confirm the lack of participation of the market.

However, many of the REITs and Trusts seem to be holding up quite well though. Seems like no one really believes in the rate hikes? I've been hearing a lot of kopitiam chatter about buying REITs, sure win, cannot lose. It's making me more skeptical of that whole arena.

On the whole, I feel that are actually many issues that are really quite attractively priced for the long-term investor, but it looks like deeper bargains might be coming around soon.

Anyway, no rush, being a retail investor is great, haha.

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