Small caps, Tech and China-theme SGX stocks

Welcome to 2006, the year of the small caps, esp, tech and china-theme stocks of SGX.
After more than a year of hibernation, the small caps, tech and china-theme stocks in SGX leap to life for the past 3 days. Speculators and investors alike are snapping them up like there's no tommorrow. Will this momentum continues? That's the million-dollar questions!
In my view, this momentum will continue as the blue-chips have been pushing the SGX index for the past one year. Lots of investors have made money and there will be excess liquidity and clamouring for more money. Greed is universal!

How to choose good stocks for Trader Yap?
For me, it is easy. I call it Trader Yap's Ez3STEPS

Step 1: Made sure it is listed in the main board rather than Sesdaq!
Step 2: Low CURRENT PE of less than 10x.
Step 3: Buy when they are at 52 weeks high!
Step 3a: Sell if they dropped by more than 10% after making the new high.

"Buy at new highs, are you crazy?" You must be thinking!
NO, I am not crazy.
And let me lead you through Trader Yap's Ez3STEPS Step by Step.
In step 1, we let SGX (The authority, they might not be the best but we have no chioce here! In SGX, I trust!) do the sorting for us, good companies with establish earnings!

Go MainBoard!!!
But Imagine you are SGX and all commercial ventures are desperate for money.
"You cannot made it here but I offer you to go to my secondary board. Ring Ring
(SGX Cash Register still Ringing)!!!"

In step 2, we are screening those companies with real earnings and profits currently, NOT forecast. Thus PE ratios are important. You don't want to be involve in concepts stocks like UniFibre or Global Voice despite what the fund managers and analysits might say! Remember Interra for those with long history in the market. I am not saying that they are no good and you can't make money off them, but I am saying that they are not suitable for normal people.

In step 3, we let the market screen the shares for us, stocks are 52 weeks are normally stocks that are being accumulated or cornered (or else how do they can't be this high!).
We are riding along with the market. The market participants, the big players, the fund managers are telling us that through their ACTION, not reports!

But do remember that the all 3 steps must be present before you take action.

So how do you make money off Trader Yap's Ez3STEPS.
There's Step 3a, cut loss when they are 10% off your initial purchase price!
Preserve capital, live to fight another day!
Say bye bye to this stock! There are more stocks in SGX than your budget can buy!!!

So when to sell and take profit?
You should sell when the stock is 10% off the new 52 weeks high for 1 week!

I will talk about the reasons why in my subsequent posts!

So these are Trader Yap's picks for this 1st quarter :

China Theme
1. China Hong Xing (61.5 cents at the time of writing, off all time high of 63.5 cents)
2. China Sky (59 cents at the time of writing, off all time high of 60 cents)
3. China Sun-Bio (51.5 cents at the time of writing, off all time high of 53 cents)

But beware that these stocks are maybe highly violatile and maybe thinly traded.
ONLY speculate with money YOU can LOSE!!!
Trader Yap do trade on these stocks at times!!!

Do give me your comments, suggestions or criticisms to me at
traderyap@gmail.com.