Market Brief with 2 Buy Ideas 27 June 2015

Over the past 2 weeks, we are seeing decline in China market with the sell-off continuing on. The Shanghai composite index came down to as much as more than 7% by yesterday’s closing. However, this does not seem to be a ‘crash’ in my view and it seems that it is still unclear when the sell-off will stop. Even as some says its a bubble, a bubble can take a long period of time to ‘pop’ too. We have to take in view that margin lending is one of the main driver for the Chinese market, with the retail investors account for as much as 90% of the daily turnover. Furthermore, this is fuelled by new investors swarming into the market. And of course, not forgetting about the punters and speculators, treating the stock market like casino. Perhaps, we could be expecting the China government to step from here on?

Hong Kong market seems to slow down their acceleration, and from the way it looks, it is consolidating. Singapore market slowed down, and the STI pulled back from the recent 3549.85 high. For the past 2 weeks, pretty seems like it is in consolidation phase too. It is important to note that with the Greece issue looming, overall markets will remain cautious.

Meanwhile, Ezion and CapitaLand Commercial Trust are 2 buy ideas I have in mind.


Trading sideways at the moment
20 days moving average looks to be a good support

Entry price: $1.04
Stop loss: $1.02
Target price: $1.10
Next resistance: $1.125

Time frame: 1 – 2 weeks


CapitaLand Commercial Trust

Counter seems to be trading sideways recently, decline slowed down
Seems to find support at $1.53 (Indicated by green arrows)
Overall, do note that the counter is still in a downtrend
Breakout from 20 days moving average will be crucial for further uptrend

Entry price: $1.53
Short term 3 months target price: $1.68
Long term 1 year target price: $1.80