CFD – November 2nd 2009

Canon, Inc. (TYO:7751)

Beta: 0.92

Canon’s attempt to break higher last week failed again as it unable to get past the key 3,716-3,750
resistance barrier. The stock ended the week down by 2.49% despite it gained 1.73% on Friday.
MACD on both daily and weekly are also falling, indicating that more downside is to be seen on
Monday. Added with the fact that European and US markets were both tumbled on Friday, it is
almost certain that Canon will also take a hit during the upcoming session.

Upside, the resistance will be the same 3,716-3,750 area while at the downside, supports lie at
3,261-3,290, 3,119, and the pivotal 2,900-2,927. While whether the correction off 2,115 low has
been completed at 3,750 remains to be seen, the outlook is bearish at the moment. Short into
rallies may not be feasible if the stock to open on a gap down next Monday, but as long as the
three peaks hold (3,716-3,737-3,750), bears will remain in control.
 China Telecom Corporation, Ltd. (HKG:0728)

Beta: 0.93

China Telecom looks set for another slide next Monday after it was retreated off its high on Friday
and formed a bearish candle. With Asian markets are likely to trail the US and European markets’
decline, ChinaTel is highly likely to break through the support at 3.43. This will open the way
towards 3.12 and then 2.81. A rather messy head-and-shoulders pattern is also seen on the daily
chart, with projected target at 2.48. On the upside, resistances are seen at 3.90, 4.15, and 4.44.
Look to short this stock, aiming at 3.12, 2.81, and even as low as 2.42. Like Canon, it is likely that
the rally off 1.80 has been completed and either the coming slide is wave B or a new impulse wave
downwards. Either way, the bias is bearish.

Note that China Telecom has been added to the watchlist to replace CLP Holdings Ltd. (HKG:0002).
First consideration is that ChinaTel sees more fluctuations and therefore, room for gains. It also has
higher beta than CLP. Second, comparing the prices of both stocks, ChinaTel is a lot cheaper
(merely 10% of CLP’s) and thus more attractive.
 Reviews & Notes
• I expected Advantest to decline last week and that resistances at ¥2,401-¥2,449 could be used
as entry points for SHORT. The stock went up towards ¥2,410 on Monday and hit ¥2,040 on
Thursday before it ended the week at ¥2,060.
• My proposed entry point at 12.95 on Cathay Pacific was not met as the stock only reached
12.72 on Tuesday before it tumbled towards 12.10. On Friday however, it jumped to 12.82
before it ended the week at 12.74.
• PetroChina retreated to 9.36 last week, but still above the 8.45/8.46 key support. Still, as
weekly MACD is now falling the stock may see more downside towards twin supports, possible
heading to test the channel bottom around 7.00.
• I don’t know at which price anyone entered SHORT on Kyocera, but last week’s upside attempt
was unable to trigger the suggested stop above ¥8,190 and the stock slipped to hit ¥7,630 on
Thursday before it closed the week at ¥7,750. I see more downside on Monday on this one.
• Three-crows pattern eventually pushed Sun Hung Kai towards 112.30, as expected. Weekly
and daily MACDs are still pointing downwards.
• Tokyo Electron crashed towards ¥5,040 last week before it settled at ¥5,240. More downside is
expected as it eyes at the channel bottom at ¥4,955.
• SHORT Sinopec was apparently a good idea as the stock fell towards 6.56. Objectives at 6.38,
5.82, and 5.38 have not been reached, but it is likely that these levels may be seen on the next
session.
• Sumitomo rallied towards 239 after it touched 225 low. Both weekly and daily MACDs are rising
now, but it is likely that Sumitomo may fall on Monday, sharing the European and US shares’
fortunes last Friday.
• After tumbling towards 40.60, Wharf had rallied back near 43.90. Anyone looking for a LONG
should be somewhat able to jump in during the dip towards 40.60. Monday will see some
pressure on Wharf.
• Sony reached exactly 2830 on Friday after gapping up, but subsequently pushed back to settle
at 2785. Despite its breakthrough, Sony will have to face pressure in the coming session before
attempting to resume its move up.
• I’m pleased that my expectations over last week was mostly in line with the results. Hopefully,
they were useful to the readers. I’m sorry to say that I will take off the European and US stocks
from the daily analysis, because I want to focus more on the Asian stocks. In the future, I will
try to add Indonesian stocks to the watchlist as well. I believe there have been a lot of people
already covering the European and US stocks while analysis of Asian stocks are not that
common. This what prompted me to focus on the Asian markets. In the future, I will continue to
try making Technically Speaking better. I hope readers would not hesitate to send me feedback
to improve TS.
 MARKET DATA – 30/10/2009
JAPAN - NIKKEI 225 Open High Low Close Prv Dy Dy Chg Prv Wk Wk Chg
Advantest Corp. 2,105 2,105 2,050 2,060 2,065 -0.24% 2,370 -13.08%
Canon Inc. 3,550 3,560 3,500 3,530 3,470 1.73% 3,620 -2.49%
Daikin Industries Ltd. 3,170 3,180 3,120 3,150 3,120 0.96% 3,220 -2.17%
Honda Motor Co. Ltd 2,950 2,955 2,880 2,880 2,910 -1.03% 2,805 2.67%
Kyocera Corp 7,770 7,860 7,690 7,750 7,710 0.52% 8,050 -3.73%
Mitsubishi Estate Co. Ltd 1,359 1,435 1,328 1,404 1,354 3.69% 1,416 -0.85%
Nikon Corp 1,719 1,741 1,706 1,734 1,671 3.77% 1,781 -2.64%
Nippon Oil Corp 453 454 439 453 445 1.80% 477 -5.03%
Nippon Steel Corp 343 353 342 353 338 4.44% 357 -1.12%
Nissan Motor Co Ltd 659 673 655 672 641 4.84% 658 2.13%
Sony Corp 2,780 2,830 2,765 2,785 2,710 2.77% 2,670 4.31%
Sumitomo Metal Industries Ltd 233 239 231 237 229 3.49% 235 0.85%
TDK Corp 5,200 5,380 5,200 5,340 5,020 6.37% 5,320 0.38%
Tokyo Electron Ltd 5,250 5,280 5,190 5,240 5,080 3.15% 5,700 -8.07%
Toyota Motor Corp 3,650 3,670 3,630 3,660 3,570 2.52% 3,590 1.95%
Nikkei 225 10,006.84 10,049.59 9,984.33 10,034.74 9,891.10 1.45% 10,282.99 -2.41%

HONG KONG - HANG SENG INDEX Open High Low Close Prv Dy Dy Chg Prv Wk Wk Chg
Bank of China 4.44 4.60 4.42 4.54 4.33 4.85% 4.66 -2.58%
Bank of Communications 9.75 9.82 9.40 9.50 9.68 -1.86% 10.58 -10.21%
Bank of East Asia 28.00 28.20 27.60 27.80 27.25 2.02% 28.55 -2.63%
BOC Hongkong Ltd 18.20 18.30 18.00 18.20 17.64 3.17% 18.22 -0.11%
Cathay Pacific Air 12.44 12.82 12.44 12.74 12.18 4.60% 12.74 0.00%
Cheung Kong Ltd 99.50 100.90 98.85 100.80 97.10 3.81% 105.50 -4.45%
China Construction Bank Corp. 6.70 6.93 6.69 6.81 6.62 2.87% 7.05 -3.40%
China Life Insurance Company Ltd. 37.05 37.50 36.25 36.50 36.30 0.55% 37.75 -3.31%
China Merchants Holdings Co. Ltd. 25.05 25.65 25.00 25.40 24.75 2.63% 27.20 -6.62%
China Mobile 74.50 75.20 73.85 74.00 73.75 0.34% 76.80 -3.65%
China Overseas Land & Investment 16.90 17.30 16.82 17.08 16.34 4.53% 18.10 -5.64%
China Petroleum& Chemical Corp. 6.77 6.83 6.65 6.72 6.63 1.36% 6.88 -2.33%
China Resources Enterprise, Ltd. 25.65 26.70 25.60 26.50 24.35 8.83% 24.65 7.51%
China Shenhua Energy Co. Ltd. 35.60 36.35 35.40 35.65 35.10 1.57% 36.45 -2.19%
China TelecomCorporation Ltd. 3.52 3.59 3.50 3.51 3.45 1.74% 3.64 -3.57%
CITIC Pacific Ltd. 20.50 20.70 20.20 20.20 20.15 0.25% 21.00 -3.81%
COSCO Pacific Ltd. 11.22 11.22 10.90 10.94 10.88 0.55% 11.84 -7.60%
Esprit Holdings 53.00 53.30 52.20 52.60 51.90 1.35% 54.90 -4.19%
Foxconn International Holdings Ltd. 7.20 7.37 6.91 6.99 6.97 0.29% 7.33 -4.64%
Hang Lung Properties Ltd. 30.35 30.35 29.55 29.85 28.90 3.29% 31.10 -4.02%
Hangseng Bank Ltd. 112.00 112.00 110.70 111.30 110.00 1.18% 111.20 0.09%
Henderson Land Development Co. Ltd. 54.00 56.30 53.90 55.85 51.85 7.71% 55.30 0.99%
HK Electric Holdings Ltd. 41.80 41.80 41.40 41.50 41.65 -0.36% 41.70 -0.48%
HK Exchanges & Clearing Ltd. 142.80 142.80 139.50 139.60 137.40 1.60% 145.40 -3.99%
Hong Kong & China Gas Company Ltd. 19.38 19.38 18.72 18.90 18.88 0.11% 19.46 -2.88%
HSBC Holdings 87.35 87.70 87.05 87.30 85.80 1.75% 90.35 -3.38%
Hutchison Whampoa Ltd. 56.00 56.00 55.00 55.35 54.20 2.12% 57.95 -4.49%
Industrial & Commercial Bank of China Ltd. 6.23 6.37 6.23 6.29 6.09 3.28% 6.51 -3.38%
MTR Corporation Ltd. 27.55 27.85 27.50 27.85 27.30 2.01% 28.35 -1.76%
New World Development Company Ltd. 17.00 17.40 16.74 17.00 16.86 0.83% 18.14 -6.28%
PetroChina Company Ltd. 9.81 9.85 9.56 9.60 9.56 0.42% 10.48 -8.40%
Ping An Insurance Company of China Ltd. 69.50 70.05 68.80 69.55 68.00 2.28% 72.10 -3.54%
Sino Land Co. Ltd. 14.74 15.18 14.68 15.16 14.42 5.13% 16.40 -7.56%
Sun Hung Kai Properties Ltd. 116.10 120.60 116.00 119.30 112.50 6.04% 122.30 -2.45%
Swire Pacific Ltd. 94.90 96.65 94.65 95.55 94.65 0.95% 97.20 -1.70%
Wharf Holdings Ltd. 42.50 43.85 42.00 42.90 41.55 3.25% 42.45 1.06%
Hang Seng Index 21,720.41 21,953.59 21,134.33 21,752.87 21,264.99 2.29% 22,589.73 -3.70%
Any information contained in this document are based on or derived from information generally available to
the public from sources believed to be reliable. There’s no representation or warranty is made or implied that
it is accurate or complete. Any opinions expressed are subject to change without notice. This post has been
prepared solely for information purposes and does not constitute any solicitation to buy or sell any
instrument, or to engage in any trading strategy.

Charts were generated using MetaTrader 4.0 with price data obtained from Google Finance.