- Have not traded cash equities for a few years now. Happened to chance upon this old chart montage of some Sing stocks I used to follow. Spot the odd man out.
- Starhub (bottom right corner) sticks out like a sore thumb. Must be one of the rare stocks in the market having an up quarter.
- Done a very cursory investigation - dividend yield of 7% probably explains the strong performance. Kim Eng Securities says "sustainable dividend policy supported by free cash flow generation" with E 4Q11 FCF @ 8.2 cents vs E quarterly dividends of 5 cents per share. In this low interest rate environment, I guess Starhub makes a good alternative to near zero yielding bank deposits. Almost like a high yield fixed income perpetual bond.
- Maybe not over-paying for EPL screening rights has also helped.
- So question is .. if stocks sell off large and I want to put some cash to work, do I buy something that is off sharply, or buy Starhub with its relatively superior chart technicals?
- The 50%-62% retracement zone is technically significant. Dennis Gartman calls it the "Box". Deemed as good entry levels to position for trend resumption after a counter-trend move.
- Charts of a few Singapore equity blue chip benchmarks (CityDev, DBS, Keppel Corp & SingTel) here. Jun07 high to Mar09 low = main trend = down. Mar09 low to 2010 highs = retracement = up.
- Notice that all these retracements have made it into the Box ie upmove over and should all now trade lower in the months ahead. SingTel seems to have run ahead of the crowd and gone back below the 38% Fibonacci level. I wonder why that is (reckless EPL bidding to capture share in tiny market = poor reflection on company?).
- Mis-read markets badly this week (was looking for calm and order) and taking a break to avoid making more bad decisions. Until I get my back sorted out (too painful sitting down, am writing this kneeling on floor) and also back in sync with markets, will be posting with less frequency than usual.
Big picture quarterly charts of Capitaland, DBS, Keppel Corp + SingTel- At current levels, there is more room to go down then up.
- Risk reward does not favor holding onto longs.
