Singapore Press Holding Trade

1. Singapore SPH's (Ticker T39.SI) recent low in mid Mar 2009 was 2.31. It has fallen more than 50% from its Dec 2008's peak at 4.82. The pattern of falling price in Jan 09 suggested that there would be little resistance from current level of 2.90 till 3.10. The real resistance may come in when the price is approaching 3.30 level, hence the target has been set near there. 3.30 is also near the 38% retracement level.

2. Does that mean I will only sell at 3.30 and ignore the market?
2.1 Yes, I will only sell the position at 3.30 unless there is major event affecting the stock.
2.2 No, I will sell the position when the selected technical indicators suggesting the time is ripe to exit the position.

3. How is it possible to do the above?

3.1 To safeguard above 2.1, 'cut loss stop' (at price slightly below entry price, usually the support level of the current trend) is placed immediately after position is taken. When the profit (greater than the loss to be absorbed by 'cut loss stop') starts to show, the 'cut loss stop' is changed into 'profit trailing stop' and the initial setting of the stop is equal or greater than the entry price. The stop is either manually or automatically (if trading platform allows) adjusted upward when greater profit is shown. (Note do not adjust stop lower)

3.2 To safeguard above 2.2, more sophisticated trader may check the various selected technical indicators for major violations. Since SPH is trending up nicely, Regression Trend Channel can be a good reference for monitoring the trend. Knowing Candlestick pattern will definitely a big plus. Another useful tool to check momentum is to mark the Accumulation Day (higher price with higher volume than previous day) and Distribution Day (lower price with higher volume than previous day) down. In an up trend market, watch up for Distribution Day. Too many distribution days or when they happen too closely suggest that the bigger players are dumping the stock.

4. Will I enter a trade if the expected loss from 'cut loss stop' is equal or greater than the potential profit of my target? My answer is NO and I will look for other better opportunities.