Singapore Stock Market for Beginners – Learning from NOL & Noble Group

Following my earlier stock market picks and key learning on Singapore stock market , I continue to monitor the Noble Group and NOL on Singapore stock exchange today and I am writing about my learning today here as a guide of stock market for beginners.

Let’s look at what happened to NOL & Noble Group today.

NOL formed a black candle today, look closely you will notice that NOL hit a strong resistance of 200d MA and therefore it turned south. As a guiding principle of stock market for beginners, there is a saying that 200d MA is the borderline between bullish and bearish market for many traders.

If the market is now trading above 200d MA implying a bullish market and you see the market price is correcting towards the 200d MA, then many bull traders will perceive it as a good entry to long in the market. This increase in Long interest and Long entry will naturally lift the price up, creating a support at 200d MA to rebound. However, think if the buying interest is not able to outnumber the selling pressure, then the market sentiment can turn bearish if the price falls below the 200d MA. The bear trader will then start to cut loss and naturally the market will turn down further.

Following the same logic,  if the market is trading below 200d MA implying a bearish market and you see the market price is moving up towards the 200d MA, then many bear trader will perceive it as a good entry to short in the market. This increase in Short selling interest will push the market price down. Therefore creating a resistance at the 200d MA for the price to correct downwards. However, if this Short selling is outnumbered by the buying sentiment, there will be a chance for the market to change to a bullish market as the price continue to trade higher than the 200d MA. Those bear trader will have to cut loss by buying in the stock and this helps to create a high pool of natural lift to the market to go higher.

This is the concept behind the market. However, there are always bull and bear traders in the market, how do you know who will win? You won’t be able to tell exactly if bull traders outnumber bear traders or bear traders outnumber bull traders. You can make the judgement by knowing if market price is above 200d MA (Bullish) or market price is below 200d MA (Bearish).

Now, let’s continue to examine on NOL, NOL has been trading below the 200d MA and therefore 200d MA is a strong resistance. It was tested once and did not break upwards. Today black candle just confirmed the selling pressure is stronger than buying interest and therefore a correction.

Now let’s look at Noble Group, it has been trading above 200d MA and therefore market sentiment is bullish. As it rebounded from the 200d MA support, there is a higher possibility of trending higher and continue its up trend as there is not strong Moving Average resistance on top. The immediate resistance is the previous high which is 2.7.

Having understood how the 200d MA can act as support and resistance, I am sure you will know how to assess the risk and reward now. Imagine now that you have 2 stocks which you like to go Long, one is facing 200d MA resistance and one is not. You should know by now which stock to select now!!!

Do Not Long A Stock which is facing 200d MA resistance!!!

DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.