-Bonifasius Trading-

A while ago, when my OBV indicator had an issue, I tried on AD indicator. I should not overload myself with too much indicator or i would get confused, but briefly, just for the sake of understanding, I google it.

I chose the information tab from stockcharts.com and I found that the nature of this indicator is quite interesting.

Stockcharts gives complete explanation on how does it work and how can you apply it on your trading. 

The last picture is from my trading platform of AMAT (APPLIED MATERIAL)

Oerlikon and AMAT is currently the only manufacturing with turnkey solution for thin film Solar PV cell.

As you can see, often OBV and AD indicator moves on a different direction.

I’d talk more on this after i get a better grip on the indicator.

1. ER (Energy Renaissance)
If the last 20 years have been the age of IT (information technology), the future will be for ER. It is slow, it is infant but if China keep saying ‘American has 100 years to pollute the world, this is our time, let us be’, Anyone…. Any country, Any companies who own the technology will have the leveraged , just like How iT is so unavoidable, no-man can avoid clean energy.

There are a few candidates, and I will cross out bio-energy due to the rising cost of food:

a. Solar
The point of having a solar power is to get the panel so SO SO very cheap and higher in efficiency plus better performance under a cloudy sky! I would envision a city like singapore/dubai or HK in which the solar panels blanket 3 Dimensional space on BIPV. Clearly, installing it on the rooftop or building a solar farm is wasting a lot of space and impractical. But Imagine that Solar cell is so efficient, so SO cheap that they can afford to blanket the whole building wall (with great colour pigmentation), windows and the rooftop. Where the integrated panel can be easily removed (once it reaches an un-acceptable efficiency) to be then sold somewhere else or replaced with a new layer.

The race against $1/Wp cost barrier is achievable according to Oerlikon solar by 2010 in 1Gw production plant. But, by 2008 their total shipment is only 350 MW, and I’d be very much wanting to believe that they can triple their production and installation capacity in 2 years time. That is also not so mention if their ’stabilized cell’ does not deteriorate in the following years. and it is a manufacturing cost, not sales and installation cost.

Everyone can be excited with the amount of capital pumped in Thin film PV, but the future is still far ahead. The good news is it is THERE!, it is MOVING!, it is GROWING!
Theoretical cost of it per watt peak of module is 30c (excluding substrate). If this to go down,… I WILL NOT CARE if the efficiency is 5%, if i can get 10c/Wp module, I will blanket my whole building , roof , windows with it! All i need is cable , no fuel for the next decade..!!
‘JUST KEEP THE SUN SHINING”

b. Wind
c. Nuclear

FA is where i started and slowly to come and approach TA and has been working quite well for me.

Is it possible to predict future from the ‘past/history’ ? , Well, it has been a debate and TA is not about predicting future from the past and TA is not a science as well.

In my defense, TA is probability theory based on price and volume movement. Some people, or most people purchase an equity based on their ‘mood/feeling’ or how fundamentally sound is the general and specific economy.
TA is about cutting your lost small and letting your profit to run.
-yes, you can still make money consistently although you are wrong most of the time.
-yes, you can still lose money consistently although you’re right most of the time.

With the current volatility in the market, the direction is unclear. I am still holding a view that this thing is just waiting to collapse. What will happen if I can get a job next year, I have no idea.
am I scared? Just like everyone, but whoever it is, the collapse may not be isolated.

Fed is still struggling to do ‘quick patch’ the economy, but they’re treating the ‘patient’ not healing. And at times like this, I am very very tempted to analyze the situation with FA.

I need to stay consistent with my analysis way… although the sector may be chosen with a little FA help

This post it on Fundamental Analysis;
Disclaimer: I do not normally post on FA, and any information is based on author’s assumption on the current market condition.

Dow Jones and S&P500 raised more than 7% in 2 trading days on last Thursday and Friday. With Fed pleading to inject and rescue the troubled financial market.

A number is out, $700-800 billion dollar, which equate to around 1750-2000 dollar/ citizen of US (assumed to be 400 million) to bail out those owners who cannot pay out their credit.

Do US Govt has the money? … Well, NO… and this will put a greater dependency to gulf/oil producing country , spore , china and japan as they’ll print MORE BONDS and Debt!

I bet they’re getting smarter as Chinese wants 49% of Morgan Stanley and Spore Temasek must be eyeing for better chunk of Merrill Lynch (unconfirmed).

Back the rise of US -stock. Has the confidence been restored?
I am very much doubt about it.

1. If i would have to speculate, I tend to believe that the FED is buying into the market to interfere as they also start to crack down on ’short’ selling of Hedge fund. Anyone in the right mind, will not resurrect and snap Citibank and push it up to 25%

2. AUD within less than 2 months goes from .98/USD to less than .80/USD!!, the interest rate merely change by a slight and AUD lost nearly 20% value. (good news to exporter and overseas student, and bad news for local OIL Price). While oil price has dropped 30% from its top nearly $150/barrel, due to 20% drop in AUD value, the price of oil on local pump is only down by a mere 10-12% to currently around $1.50/liter. Strengthening of USD indicate a flow out of capital as USD has been strengthening towards Euro as well.

3. Rise in commodity price. If Stock is not a safe place to park your capital, and cash is no more the king (anyone holding AUD will lose 20% value in less than 2 months). then they’d hide behind commodity price. OIL price jumps from $93-$94 to nearly $100 in 2 days, Gold price spikes up, and most of commodity like soybean, and metals is also up….

I have some sectors that I am quite bullish about in the future.. and I’ll make some suggestion (Disclaimer ON again) very soon. ….

Just now, I successfully run the OBV indicator again!… good.!…
I went to Borders today and get a book by Leon Wilson , Break-through trading. It looks quite good and hopefully there is some trading strategy i can pick up and tweak along the way.
I wont be reading it soon due to my load to university. but I’ll post any interesting find that i may have.

It is a TA book. the next sensible step is to build a ’sorting system’ to potentially sort tens of thousand of stocks in the market to trade.

I have not been able to post much of TA graph lately since my trading platform is having a problem with the OBV analysis.
As you may have already seen, I have used OBV to confirm the validity of a trend and to determine if the price rise and fall is distribution or accumulation.
I have been working on it for 3 days now…
Trying to delete alot of lines from the graph analysis due to it is saying error in connection. But the AD (accumulation and distribution) indicator works!!… hmm

See how bad… worst case i’ll call them in the morning.

I met my old friend’s housemate today, an experienced 2 years++ trader at ISX (Indonesia Stock Exchange). Lets call him Andy.
He is a fundamentalist, but he does still use some TA indicator as well.
I Have been out of ISX for 2-3years now tho most of my relative still trade there.

Andy and I had a discussion on the FA and TA approach…. and he mentioned something quite hilarious

People say, if it is bullish , it is like climbing a ladder… slowly going up, but if it is bearish, it is like jumping off the window!! hahaha

I will not to look back to tell a story of my old time sake back in JSX (Jakarta Stock Exchange before it is being merged with other local bourse to crease ISX).

But looking at the chart of AAPL, GOOGLE and BHP last night, made me realize that this bearish trend is coming to STAY!

Lehman Brother has just filed for bankruptcy (the institution that survived for nearly 160 years, surviving 30’s depression and many more ) , Merrill lynch is sold to BOA after capital injection from TEmasek and Dubai Sovereign fund And asset sales cannot keep up with the asset writedown and bad credit.

Where is this going,…… i believe we’ll be seeing more red candlestick (if you’re not chinese in china) in the future.
This is the bear Cycle.. and the volume on OBV has confirmed that the distribution is HAPPENING!
Google OBV level and Apple is exactly the same as before they took off about a year or a little more ago.

if you’re a stock trader (especially a fundamentalist) with a ‘Long’ position and strategy, it will be wise to pack your bag as CASH IS KING now!
AUD plummet from 0.98 to below 0.8 (nearly 20%) in value in about 2-3 months. Where has those money flew into? Nobody knows, …. USD has strengthen, Oil is falling as the speculator realize that it is time for them to liquidate their asset and to keep it under a safe drawer.

Where can you hide? As for now, the smart is the one who would survive.

Is there still an opportunity? Fortunately, The answer is ‘Yes’…. =)

PDN being one of the largest Uranium producer in the world has been affected with the slowdown and bearish trend in the general market.

I believe it is a fundamentally sound company with its founder being the CEO, the stock price has gone from 1 cent to around $10 in the last 6-7 years.

Anyhow,.. enough about the fundamental. I recently traded PDN on my simulation CFD trading, and since has not traded at all anymore due to the uncertainty in the general market direction.

I just take a peek at PDN and intrigued with the OBV indicator.

Latest PDN CHART is below:

OBV analysis

As you can see, Currently PDN is at around $4.70 support price (DOUBLE LINE ON THE RIGHT HAND).
If it happens to breach the level, I’d expect it to go lower.

THIS IS NOT A TRADING RECOMMENDATION. As the chart is below MA 20, 50 and 200, only use a bearish Setup if you plan to trade.

What is interesting is because the STO indicator has registered D,K (11, 19) OverSOLD value (below 20), It could simply bounce back up. However, we need a back up confirmation.

So, I draw horizontal line on Early august (similar price level where the support is formed). and I draw similar line on OBV indicator.

Well, OBV indicate that from 8 to 13th of august, the price of PDN is remain on the same range, but THE OBV is increasing significantly (that should also be another reason for the strong bounce of PDN when it was previously traded LONG).

Second, while the price level on early august and today’s is at around $4.70 -4.80, the OBV of the early August is similar with today’s as well. ( Anyone who bought on early august when the chart is breaking through MA20,50 and 200 should pay attention to my correction interpretation on MA, only valid if it cross on UP slope!)

Third, the good news is that the OBV is still stronger than April-May 2008 period when it register a value below 0.

For now, It is a hold and see…. there is not enough evidence that it will bounce back up.

Today I found that I should have purchased more PDN before if I’d have paid more attention to the OBV indicator.

If we’re back in the same page like a month ago,… i believe PDN will go back up if the general market turns out to be bullish again.

But I maintain a Bearish look on the market for now based on the chart below.

I realized this suddenly just now that the only reason why I believed that S&P 500 chart may be bullish is
1. Making a higher low (which is a valid bullish indicator).

2. MA 20 is now crossing above MA 50.
This IS NOT always valid to indicate a bullish indicator.
ONLY IF RISING MA20 crossing above a RISING MA50, it will indicate a bullish trend is formed.

Recently, I have been putting more attention on William J. O’Neil book’s of Short trading. Well, the book is thin and mostly it is about a single short strategy of trading ( Head and shoulder formation followed by 2-4x failed attempts to break above MA 50).

To note that most of his charts is weekly or bi-weekly chart represented in a single bar. therefore, my analysis on the current S&P 500 is experimental. I would also assume a hermeneutical effect from reading the book recently, however, this is just an attempt to recognize a chart pattern. 

The figure of the latest S&P 500 is shown as below:

On the top left hand side, (sorry i couldn’t edit the picture on my mac), there are 3 horizontal bar, and I’ll call them A, B and C. starting from the left hand most of it.
A= Left shoulder
B= Head
C= Right shoulder
The pattern fits the criteria in which the right shoulder should be lower than the left shoulder. (It would simply explain the index fallt in the next few days afterward).

Then there on the right hand side, there is 4 lines pointing at one direction upward. Note that the blue line is MA50 lines, the 4 lines are drawn based on the daily chart of the candle stick trying to break the MA50 and failed.
On thursday, S&P dropped 3% below its support level 1253 ( draw a mental picture of this line).

The Question left to answer is,…. with the current fundamental of US market, it may not be long after the election that the crash may happen. I am still very very skeptical that the worst in the market has over yet. So,.. is this a signal to shift the strategy to bullish setting? hmm,…. we’ll have to see….