Monthly Archives: April 2013

Stock to Watch: Uemland [5148]

Our index rose and tested the all-time high today but the overall sentiment remained bearish with losers outnumbered the gainers by more than 150 shares. Such a divergence in the index movement and true sentiment that happened in an uptrend tells us to stay away from the market if possible as the bears are still conquering the market. Having said that, there are still opportunities to profit, especially from the extreme movements of some shares. While most KLCI constituents are in green today, Uemland [5148] fail to stay strong as it slid by 13cents, putting the counter in the top 10 losers list.

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Stock to Watch: Aeoncr [5139]

Despite the local index edging up slightly, the overall sentiment of our market continues to be weak today, with the ratio of losers to gainers stands at a high of 2.18. The uncertainty of the result of the coming election is inducing most of the market participants to “sell on strength”, causing most shares that have rose dramatically in the past few months – property stocks especially (e.g. Tebrau, KSL, UEMLand) – to begin reversing, thereby forming the “wave a” of Elliot Wave (The first leg of the downtrend that follows the 3-waves uptrend). Property play is not over yet but at the moment, with the current weak market sentiment, it is definitely not safe to enter into a position. We will take a brief look on Aeoncr [5139] instead, which is also beginning to reverse from its 3-months uptrend.

aeoncr

13th and 14th of April 2013 Investment Workshop

The first investment workshop in 2013 was successfully held over the last weekend, where a total of 12 students participated in the 2-days intensive training. In the class, students were taught mainly on how to read charts and how to identify the safest entry and exit points for any given investment. After teaching them all the candlestick and chart patterns that work well in our market, I taught them how to integrate all these knowledge in analysing the movement of a share price with their personal risk tolerance level. Other specific money management techniques that I’ve picked up from my trading experience are also shared with the students, in hope that they do not make the mistakes that I had made. Apart from that, I also revealed to them some of my proprietary trading secrets (Sentiment Analysis) which are extremely helpful in avoiding catastrophic losses. Each student is given a comprehensive workbook in which they are required to draw patterns and write notes. Examples are given too for future reference.

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Stocks to Watch: Padini [7052], Sendai [5205]

As requested by some of the readers, we shall discuss on Padini and Sendai today. Let’s begin our analysis with Padini [7052].

padini (1)
Ever since the uptrend was projected in late February, share price of Padini has been moving up gradually. Just recently, it hit a short-term high of RM2.10 on the 9th of April before falling for 4 consecutive days, partly due to poor market sentiment. The share price was dragged below its upward channel to its horizontal support of RM1.86 yesterday and after trading at a tight range, price managed to close higher at RM1.88 today. The signal for potential reversal and limited downside risk at the current price level means that long-term investors/ traders should start accumulating this share now. While the upward channel is no longer valid, the uptrend remains intact as long as the crucial RM1.86/RM1.85 support is not breached.

KLCI: A Healthy Correction

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The long expected correction finally happened. This came after the index closed above the 1700 level for the first time on Thursday, causing the general public to believe that the market is about to catch up with our international peers that have been rallying since early January. The index plunged by 17 points to 1698.53 today after hitting its all-time high of 1716.47, closing the day 8.51 points lower. The bearish signal had appeared on the 10th of April where a divergence in the index movement with the overall true sentiment (as judged from the number of gainers to losers) can be seen. Such a divergence is a good leading indicator in identifying possible huge dip. By following this indicator, traders/ investors would have avoided much of the huge dip that happened in the past few years, thereby avoiding catastrophic losses on their portfolio.So how would the index perform next week?

Stock to Watch: Maybulk [5077]

Our focus today is on Maybulk, a share which had moved by more than 30% since January. With the uptrend becoming clearer and steeper, is there any more opportunity ahead or is the correction about to come soon? We shall answer these questions by looking at the chart from both the bull’s and the bear’s perspective.

maybulk1
After forming a minor double bottom in December, price started to move higher and had successfully created a few higher highs. This, coupled with the lower lows formed in months prior to the formation of the double bottom, had made the rounding bottom formation clear. The down-wave that occurred in mid-March after the successful creation of the rounding bottom could be treated as the “handle” of the cup-and-handle pattern, which is essential for share price to climb to higher grounds. After breaking above the right edge of the “cup” 2 days ago (bullish), the share price is currently “resting” at its major resistance-turned support of RM1.64, providing traders a good opportunity to accumulate. As long as the share price stays above its uptrend line, we would expect the bull to continue to dominate in the near future, bringing Maybulk’s share price higher.

KLCI: A Roller Coaster Ride

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An extremely volatile market it is today with the index dipping by more than 50 points in the morning in anticipation of the dissolution of parliament. It recovered gradually once the dissolution is confirmed and ended the day marginally higher than yesterday’s closing. As we can see from the chart above, the index reversed after touching the lower boundary of the upward channel, creating a total move of more than 100 points in a single day. As was mentioned in the previous post, as long as the index stays within the upward channel, we can still afford to be bullish. This bullish view is further supported by the fact that the recent upward movement had created a “cushion” that ensure any downfall caused by election fear will not alter the effective trading range. If the index were to remain at low levels in the past few weeks, then the stance would be a bearish one since a dip like the one we saw today would bring the market to levels lower than 1600, thereby changing the effective trading range (which is dangerous because the lower boundary of the effective trading range cannot be known with certainty – This means that the risk is not assessable, and the risk-reward ratio cannot be estimated).

Stocks to Watch: CCM [2879], Tebrau [1589]

The market is extremely bullish today. The index rose by a staggering 17.39 points, with gainers outnumbered the losers by 298 shares. Some of the shares had managed to create new highs (UOADev, Tenaga, Pwroot) and are definitely worth the look as they may continue their rise tomorrow. But let’s not discuss about these shares because despite their possibility of continuing their upward movement tomorrow, the risk-reward ratio will rise slowly as price increases, making any trades in these shares to be increasingly dangerous. We are more interested in finding out shares that have yet to join the hype and are preparing to surge. We shall begin our analysis with CCM [2879].

CCM