Overall Weekly Market Outlook – For the week of 03 Nov 2014 - 07 Nov 2014

The recent bull run is impressive which has broken the resistance at 17,300(since 22 Sept 2014) . This is matched with the increase in volume. RSI has indicated that there will be increase in momentum and also with MACD indicating more buying. With more company’s reporting earnings meeting analyst estimates, we can expect the market to run further

Lets see what will be the candlestick tonight to prepare for the next action for 04 Nov 2014.

Your next question come? When will the next pullback or top be? Stay tune to sgwiseinvestors.blogspot.com daily to make sure your position before the next market downturn.

Recommendation

One of the stocks that shows in my radar is WUBA

KWEB is China ETF and from the chart, we can see that there are high volume on the 30 Oct 2014. It is showing white buy bar with high volume. On the 31 Oct 2014, it is shooting star with lower volume. This means that people buying on 30 Oct 2014 are not selling on 31 Oct 2014. We will like to see a white bar on 03 Nov 2014 to give us a confirmation that it will be moving higher.. RSI is pointing upwards thus we can expect it to move higher.

DO NOTE:  This fund comprises of ALIBABA and other china internet stocks

With the recent run-up, we can confirm that “ACCUMULATION” around price 34-37 range from BB has been completed. Tencent has purchased more shares and accumulated about 25% of the company. Thus we can say that the bottom has been met and next action will be ”UP”. Increase in volume for 31 Oct 2014, shows that there is increase in buying and more upside is to follow through. We can expect the price to reach 200MA at 43.05. There might be a small pullback before it resumes to meet its high at USD56 (since July). RSI shows that the stock is increasing in momentum and still have a lot of room to run.

It has good fundamental as Tencent has decided to use WUBA as a tool to compete with ALIBABA and with the recent purchase of minority shares of Edaijia that will boost its presence in Mobile.

Recommendation

I think “Aggressive risk taker” can buy some shares for WUBA at the present share price else the price to acquire when there is a pullback. Stop loss will be at around USD34.

Purchase Price: Above USD40 dollars (Tencent’s purchase price – this will act as strong support).

Stop loss: Below or equal to USD36 dollars.

Short Term Target price is USD43dollars.

Long Term Target Price is USD 56dollars.

Next earning announcement is 19 Nov 2014. (to be confirmed)