SGX Insider and Substantial Shareholder transactions for 12 - 16 Mar 07 & Market Commentary

This week, I'm trying something a little different with the transactions data. I'm still experimenting with a few different ways to display the data.

Here are the more significant insider and substantial shareholder transactions reported on the SGX over the past week:



From the transactions, I've noticed the directors of Allgreen and Hotel Properties selling out some of their shares. But overall, the buying is still overwhelming the selling.

Over the past two weeks or so, I read a short write-up by an economic research firm about the selldown in the China market. Apparantly, the selloff was 'engineered' by the Chinese authorities to curb the widespread speculation and the provision of loans to businesses and individuals alike. The arguement was that many chinese manufacturing firms are making huge losses in their bid to gain market share by pricing their goods at a very low price (now we know why china made goods are so cheap). And as a result, many will be unable to repay the loans that they took from the banks. Easy credit was also made available to individuals who used the 'easy' money to drive up the chinese stock market. This led to the establishment of a 'special task force' by the chinese government to curb speculation, and the selldown in the chinese stock market MAY continue.

The Hang Seng Index has since bounced back slightly from oversold levels on the stochastics. The current overbought level on the stochastics suggests that further upside may be limited.

US MARKET
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The highlight of the US Market in the last week was the 200pt sell down in the Dow Jones Index and the Nasdaq Composite shed about 50 points. It was caused by two instances of poor economic data/news. The first was the continued weakness of the housing market, and the second was slower than expected retail sales numbers. As expected, the market was still very skittish because of what happened the week before, and the slightest hint of bad news usually send investors running to sell. Those who followed the stochastics and market breadth oscillator would most likely have got out safely or profited from the selldown as both of these indicators were on the high side the day before the big fall.

SHORT-TERM OUTLOOK
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Market Breadth Oscillator: Neutral, from high region
Volatility Oscillator: High
PCR Oscillator: Neutral
Stochastics: Neutral but may continue falling

The indicators are not giving any clear direction for the market in the near term. But ideally, a further short sell-down bringing the stochastics and the MBO to low levels and the PCR oscillator to high levels would give a strong setup for going long.

MEDIUM-TERM OUTLOOK
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The stochastics on the weekly chart is now at a low level, but the MACD is just starting to fall. The opposing directions of these two indicators suggests that there might be a short rally or sideways movement in the coming weeks.

Have a gd week!