Is it time to buy?

In the near term, should stock markets – following a brief rebound in the first few days of February – decline into the second half of February, I would buy some stocks for a rebound. And if stocks now fail to decline and continue to rally right away I would use strength to lighten up positions." -Marc Faber

Similarly, although markets have been tumbling, and definitely on its way to a full-fledged correction now, I think the time to buy is near. Remember, buy when everyone else panics. DBS describes that a correction takes 3 stages: disbelief, panic and despair. The correction is said to have moved into panic mode. I thought this was best captured in Sat Straits Times (6/2/10) with its headline "Markets plunge over US, European fears". Whenever the Straits Times carry a headline like that, it usually signals that the correction has reached/ is reaching a bottom.

My own anlaysis also reveals that in a correction, the best time to buy would be 1 month from the start of the fall of the STI. Since the STI started falling on the 11 Jan, this could mean the time to buy would be any time from this coming week till the end of the month of Feb. What are the stocks to buy to best capture the rebound? The component stocks, of course.


Banks Support Resistance

DBS (14.04) 14.00, 13.60 15.70
UOB (18.00) 17.90, 17.60 20.00

Commodities

Noble (2.76) 2.50, 2.30 3.40
Wilmar (6.11) 5.90, 5.80 7.10


Offshore

KepCorp (8.18) 8.10, 7.70 8.70
SembMar (3.37) 3.30, 3.00 3.90


Others

Semb Corp (3.45) 3.30, 3.10 3.90
ST Eng (3.16) 3.00, 2.80 3.30


I have not included the property counters as Capland could be in a bearish phase and there are inherent policy risks. The signal to buy would be when stocks make a rebound from their support levels.