Category Archives: Industrial Products

Top Performing Sector(s) in 2016

The easiest way to make money in the stock market is definitely by riding the strongest trend. By buying the strongest stock in the strongest sector of the year, one could make enormous gain with minimal risk. Hence, the biggest task for every investor/trader at the start of the year is to identify which sector(s) would outperform the market for the year. My best guess for year 2016 would be the FINANCE and PLANTATION sector. Here’s why.

Be extra Cautious: Inari [0166], Fibon [0149], Ghlsys [0021]

I’m bearish at the moment. Why? Because most people are bullish after their big gains on penny stocks in the last 2 weeks. The higher the stock price escalate, the more optimistic they are. The ordinary folks are getting more confidence about their stock picking ability (without realizing that their returns were actually beta return and not alpha return) and are giving “tips” around. Bets are getting larger and a lot of them are increasing their exposure to leverage, hoping to extract higher returns from the seemingly good market. And if you notice, the top 20-30 most active volume list of shares is dominated by penny stocks (Keep in mind that pennies are always the last to move). These are obviously signs of a coming downturn.

Now, here are 2 simple ways of telling whether the uptrend of the stocks that you are currently holding are expected to reverse or consolidate soon: (1) If volume does not pick up as the share price moves higher (In other words, there’s a divergence in price and volume) AND (2) If you are making money WAY faster than the professionals and you are started thinking that making money from trading/ investment is easy when just a few months ago you were worried that your investment could turn sour, the uptrend IS EXPECTED TO END SOON. I would normally be extra cautious when I could earn about 50% (as measured from low to high/ from the point when the volume is at its peak to high) on one single counter in less than 3 months. Let’s look at a few examples below.

Stocks to Watch: Airasia [5099], CMSB [2852], AZRB [7078]

Last week was an exciting week as it was the first week after weeks of net selling by the foreign funds our local institutions and retailers turned from net buyers to net sellers. Index managed to move higher but volume wasn’t encouraging. There are several shares that are worth keeping an eye on as the sentiment shifted in favor of the bulls. We shall start with Airasia [5099].

airasia

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

CAP [5229]: A Prediction Using Relative Volume Density (RVD) Analysis

Relative Volume Density (RVD) analysis is a proprietary technical tool that encompass the element of time in price-volume analysis. It can be seen as an extension of Robin Mesch’s market profile analysis as the underlying assumption that market moves from one equilibrium to another or deviate temporary from equilibrium and revert shortly thereafter is similar. By incorporating the most important element in the universe – time – RVD analysis is considered more superior than market profile analysis because of its ability in identifying not just the levels of equilibrium but also the timing of reversal. Such a creation is inspired by the inability of traditional technical tools in identifying pivot points of speculative shares with laser-sharp accuracy. Let’s look at how we can apply RVD analysis in catching the falling knife of CAP, which ran by 20+% in just 2 days.

cap