Dividends Reinvestment Strategy Calculations

Some quick gross calculations by playing with Microsoft Excel in calculations. The table below assumes that I can save $35k this year and put it into interest generating equities of average 7.5% p.a. Then I reinvest every single dollar of the dividends back to the market every year, coupled with an increase of $1k savings per year. {I start with $70k in dividends basket}

STI Updates -- Broadening rising wedge?

Unless STI rush to 2970 by this week, the rising wedge (which is broadening) still stays. My funds are sidelined... Not rushing to add any new positions while I leave the money to grow interest in the money market fund...

The only thing that puzzles me is that Singtel actually looks quite bullish on chart... Being a major component of STI, it might mean that STI could have much further upside... Shall see how...

STI Updates

It looks possible that STI could be in a rising wedge:

However, it is still possible for the rising wedge to be broadened. For this rising pattern to be broken to become a parallel channel upwards, STI would need to reach the light blue dotted line, which to me looks like a monumental task for STI because of psychological resistance 2900 and 61.8% Fibonacci resistance level at 2970.

The music could stop any time... Clearly, a time to be prudent and not fall into traps... I have 9k sidelined ready to move in for value any time... But I can't find any undervalued stocks that are at a good entry point at the moment. Starhill is gone, Starhub is gone. Singtel has run up. Breadtalk has over-extended itself.

I'm starting to consider if I should realised the profit from Breadtalk. Shall see how it goes. I'm waiting for the 4th wave to be more clearly defined before finally selling some at the final wave....

Could I be wrong?

STI Updates -- Still rallying?

Another bull run by STI has thrown out some more possible counts. At the moment, I'm still undecided between the 1-2-3-4-5 count of A of Pri B, or the A-B-C-X-A-B-C count of Pri B. In any case, I believed the recent change in sentiments for this bigger wave started on 29th October 2009. The chart below is my updated count:

The year-end rally feels like a 3rd wave of some sort. Indeed, as counted, this is the 3rd wave. I'm glad to have positioned myself with Singtel as it is a major component of the index... Currently, I'm sitting on a little profit after having taken the dividends.

Wave i: 2605.1 ~ 2803.85 (198.75)

Wave iii is expected to have started on 30th Nov 2009 at 2729.43. If we allow wave iii to be 1.618 of wave i, then we would reach 3051!

However, significant resistance stands at the 61.8% retracement level of around 2968, so I'm unsure if this supposed wave iii would go higher. It looks quite unlikely at the moment, but we shall see.

A look at other technical indicators... CCI is at a high, MFI is at a high, %R is at very high levels... STI is indeed very overbought, probably for the year end window dressing... In addition, the rate of increase of STI seems to have slowed down a lot.... It's gradient is not as steep as the early stages in March...

I'm expecting a correction very soon... Be it a wave iv, or whatever, all indicators are pointing to a correction, probably in a week or so...... Buy on dips apply only when there's value...

There's still the possibility that my counts are wrong and a recount is required...