Technical Analysis of SMRT and SATS: Should you buy and sell

This isn’t so much of an analysis I feel. it is very clear cut. 2 transportation counters that wasn’t doing very well.

Fundamentals and Economic Moats

SMRT provides the rail transportation that majority of Singaporeans rides on while SATS focus on servicing the regional airports and food catering.

They are very defensive in that they deal with perishable services that has to be undertaken to maintain subsistence.

Decision to buy and sell

SATS (Click to enlarge)

SMRT (Click to enlarge)

1. Should you have been vested in these counters from the lows at the start of this rally, your decision might be to ride out the horse throwing you off this bull market. Whatever profits made might go back to zero but you will be able to collect more.
2. On the other hand, nothing beats earning your dividends early. Watching your capital shrink to zero and then go negative after 2 years is not a good idea as well.

The right decision I feel is probably:

1. basing on the moving averages, take half or one third of the investment and profits off the table when it moves below the 200 day moving average.
2. should the trend turns back up above the 200 day moving average, you get a re-entry point. Not much opportunity loss there and the move could be just as ferocious.
3. have a x% drawdown from each current value of your portfolio. if it goes below this x%, offload the losers and those that would not do so well.
4. in every investment horizon there are bulls and bears and they move in cycles. long term investing is a bet on sustainability of the companies you invest in as well as a punt on the macro-economic conditions being splendid going forward
5. preserving psychological capital is sometimes as important as preserving your cash holdings.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. It  contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly  here.

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Kyith

Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.

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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend.

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