Tag Archives: elliot wave

KLCI: Expecting Window Dressing Activities

Another strong green day in the local market with the local Composite Index rose by around 11 points and the gainers clearly dominating the losers. While shares are generally in the green territory, some profit taking activities in the last hours of trading can be seen in a number of them. But hey,  since its the last trading day of June and window dressing activities are expected to occur tomorrow, it’s worth a bet to hold your shares until the end of the trading day before disposing them off – if you are already looking to take profit – unless crucial support is breached. If you are underwater, don’t hold it and hope that it will rise at the end of the day. Cut it when you need to. For those of you who are curious on what window dressing means, its essentially pushing up the price of shares so that the semiannual performance of funds calculated based on the portfolio value as at the last trading day of June shows an improvement as compared to the last trading day of December last year/ the previous quarter/ the month before (May).

klci

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

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.

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.

Padini [7052]: Ready for a Huge Directional Move

Padini’s year-long uptrend was broken in September and had been on a downtrend since. The wide swings during the downtrend offered a number of opportunities to believers of short-term mean-reversion and experts in candlesticks pattern. The downtrend ended in early December after completing the falling 5-way sequence of the Elliot Wave and it’s share price has been moving sideway since.

Padini
The range which the share price has been trading for the past 3 months is tightening slowly and is converging at around the Fibonacci confluence zone of RM1.82. This is not surprising given that Fibonacci confluence zone, being the price level where multiple Fibonacci ratios align, has always been the level where price equilibrates in the medium term. The price movements of Padini for the past 1 year have successfully form a D-shape, which according to Robin Mesch signals the end of a cycle of market activity and the beginning of a new one. This essentially means that the share price is poised to make a huge directional move and it is expected to happen anytime soon given that price has been moving sideway for 3 months. Such time prediction is in accordance to Gann’s observation that “majority of trends occur in time period of 3 (3 days, 3 weeks or 3 months)”.