Saturday, October 30, 2010

Analysis of October trades by Singaporeseeds

British Petroleum, BP
Daily chart of BP

Market Analysis on 30th Sept 2010:
"The problems plaguing BP over the past few months had been finally over. With the current strength in commodities and in crude oil price, I believe BP will return to its former glory in no time. This would be a long term play and I will be targeting the BP at around 60+. Yesterday, after moving with the 50 day moving average for weeks, BP’s price formed an engulfing and a gap up. This is a very bullish signal when it happens right above the 50 day moving average. I’m looking at BP reaching 50 by end of November 2010."

Market Analysis on 3rd October 2010:
"I do not usually buy individual stocks. But BP had been a screaming buy since June this year. I hesitated and missed the first rally. It screamed at me again in early September but I was busy with other things. Finally decided to go in on the 28th of September but I was too stingy and missed it. Managed to get it on the 29th and it had been a beauty. Target price at 50.50."

Market Analysis on 6th October 2010:
"BP is at strong resistance and may move sideways a bit. This is especially after rallying so much over the past few days. My target is still at 50.50 but I’ll be watching closely to see whether it will break resistance at 41.50."

Analysis and Conclusion:
Entered BP on 29th Sept 2010 and held till mid Oct 2010. Sold off at around 41.50 when I realized that BP was not going to break above this resistance anytime soon. BP had been moving in a sideways fashion for even till now. This is accompanied by crude oil hitting major resistances and failing to break above it. This sideways movement would have eaten into my profits because I was holding onto call options. BP may continue to rally to 50.50 but I will only enter after it has broken resistance at 41.50.

Microsoft, MSFT
Daily chart for MSFT

Market Analysis on 6th October 2010:
"Microsoft is in a wedge and is also at Fibonacci retracement COP level. This is the ideal place to enter on any long position. First target at the late 2007 high of 35. A break below 23 means that the stock is going down and the sideways movement might continue."

Analysis and Conclusion:
Entered MSFT on 6th October and got out on the 18th. Then re-entered on the 20th of October and held the position till now. I have a first target at 27.50 and second target at 31. However the 26.25 to 27.50 region is a strong retracement level and with the stock currently in this region, I will be monitoring constantly and may get out if things do not look good.

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