Category Archives: Technology

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: Instaco [0069], MYEG [0138], MAA [1198]

First and foremost, I apologize for being absent for so long as I was busy with the preparation of a trading software that is expected to launch in November. Let’s discuss briefly 3 shares that I think will make a move in this coming week.

instaco

Instaco [0069], a technology company that got beaten down after its bonus issue of warrant, is expected to move higher in the near term. Lows are getting higher and higher, indicating that the break above the ascending triangle should be around the corner. The average accumulation price by the smart money is at RM0.29, estimated using my proprietary Relative Volume Density (RVD). RHB Investment Bank gives this company a target price of RM0.46 per share.